Baidu, VC-owned Qunar ups US IPO target
Qunar, a Chinese-travel website majority-owned by internet search giant Baidu, has increased the indicative price range for its forthcoming IPO and is now expected raise as much as $155.4 million.
The company, which is also backed by GSR Ventures and GGV Capital, originally planned to sell 11.11 million American Depository Shares at $9.50-11.50 apiece. According to a regulatory filing, the shares will now be priced in the $12-14 range.
Since its inception in 2005, the company has received more than $25 million in backing from Mayfield Fund and Tenaya Capital in addition to GSR and GGV. Baidu paid $306 million for its majority holding in 2011. Baidu, GSR and GGV currently own 61.05%, 6.27% and 4.54%, respectively. Their stakes will be reduced slightly as a result of the offering.
Qunar differs from online travel sites such as Ctrip and eLong in that it searches for the best flight, hotel and package trip deals offered by these and other providers, and aggregating the most competitive prices. In this respect, it is much like US-based Kayak.com.
The company's user numbers grew from 71.7 million in 2010 to 187.3 million in 2012, while web users increased from 200,000 to 21.9 million over the same period. It had 39.6 million mobile users for the year ended June 2013.
Qunar generates revenue by selling sponsored search services and display advertising to travel agents as well as by providing web platform for travel agents with limited or no online presence.
The company posted revenue of RMB501.7 million ($81.9 million) in 2012 compared to RMB123.9 million two years earlier. However, expansion has led to a significant increase in cost of revenues, which meant that Qunar's net loss widened from RMB4.4 million in 2010 to RMB91.1 million in 2012.
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