Tencent-supported live streaming company DouYu files for $ 500 million US IPO
HONG KONG (April 23): China's largest live streaming platform DouYu International Holdings Limited, backed by social media and gaming giant Tencent Holdings Ltd, has filed for a US original public offer of up to $ 500 million. [19659002] DouYu, which primarily focuses on live streaming of games, is one of several Chinese startups in the growing live streaming market in China, along with the US listed rival Huya Inc and Huajiao.
The rapid growth of the live streaming sector has seen China's technology heavyweight – Tencent, Alibaba Group Holding and Baidu Inc – open their wallets to bring back a number of companies hoping that it can increase existing e-commerce services , social networks and games. [1[ads1]9659002] DouYu has exclusive streaming rights to 29 major tournaments in China, including League of Legends, PlayerUnknown's Battlegrounds and DOTA2, according to the draft prospectus uploaded to the US Securities and Exchange Commission website overnight on Monday .
DouYu was the largest gaming platform of average total monthly active users (MAU) on both mobile and PC in the fourth quarter of 2018, according to the prospectus. The company had 159.2 million MAUs in the first quarter of 2019, which represents an increase of 25.7 per cent on an annual basis.
It set a $ 500 million placeholder amount for the listing, which is used to calculate the registration fee. The final IPO size may be different, although sources have previously told Reuters DouYu was looking to increase around $ 500 million.
DouYu's IPO could be one of the biggest this year by a Chinese company in the United States along with Starbucks challenging Luckin Coffee who also filed overnight.
Chinese companies have increased $ 271 million through US IPOs so far this year, with the biggest deal being Ruhnn Holding Limited, which raised $ 125 million. Refinitive data showed.
TAP MAKING [19659002] China is the world's largest gaming streaming market, with about 4.9 times the monthly active users of the US market in 2018. The prospectus said.
DouYu active users spent an average of 54 minutes per day on the platform in the fourth quarter of 2018.
DouYu is still losing-making and reported a net loss of $ 127.4 million in 2018, up from $ 91.33 million in 2017. Revenue jumped 94 percent to $ 531.5 million last year. [19659002] The company increased its sales and marketing expenses significantly – which jumped 73 percent in 2018 – and research and development expenses that increased 55 percent.
Most of DouYu's revenue comes from live streaming through the sale of virtual gifts, accounting for 86.1 percent of its revenue, the rest coming from ads, and a little revenue sharing with game developers and publishers, the prospect showed.
Bank of America Merrill Lynch, JPMorgan and Morgan Stanley are underwriters for DouYu's IPO. 19659016]
