VC-backed Tuniu shares jump on debt after $72m US IPO

The company sold 8 million American Depository Shares (ADS) at $9 apiece, the bottom end of the indicative range. The stock opened at $10.74 on NASDAQ on Monday and peaked at $11.24 before closing at $11.10.

The institutional backers did not sell any shares in the offering, with only four angel investors cashing out a small portion of shares. DCM, Temasek, Gobi and Sequoia now hold 69.3% of the company between them. DCM put in additional money through a private placement alongside the IPO, committing $15 million while Ctrip and Qihoo 360 contributed $15 million and $5 million, respectively.

Most travel e-commerce companies in China are essentially search engines that provide information on hotel and flight bookings plus a payment mechanism. Tuniu, which was set up in 2006, opted for a different tack, focusing specifically on packaged tourism, providing lead generation to the offline tourism agencies that have traditionally dominated the space.

According to AVCJ Research, Gobi provided the Series A round in 2008, contributing $3 million. DCM joined Gobi in the second round in 2010, worth $10 million. In 2011, Tuniu secured a $50 million Series C round as Highland Capital Partners, Japanese e-commerce firm Rakuten and Sequoia joined the investor roster.

Tuniu's Series D round came last September as Temasek put in $50 million and DCM re-upped to the tune of $10 million.

The company claims to be the largest player in the online organized tours market by transaction value, having sold more than 3 million tours since inception. These are sourced from over 3,000 travel suppliers, covering 70 countries as well as attractions in China. Overseas leisure travel products and services contributed more than 70% of gross bookings in 2013.

Tuniu posted a net loss of RMB79.6 million in 2013, down from RMB107.2 million the previous year. Revenue rose from RMB1.1 billion to RMB1.9 billion over the same period but it continues to be offset by the cost of buying tour products from suppliers and other operating expenses.

Morgan Stanley, Credit Suisse and China Renaissance were joint bookrunners for the IPO.

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• Topics
• Exits
• Venture
• Technology
• Greater China
• Consumer
• Temasek Holdings
• China
• Venture
• DCM-Doll Capital Management
• Gobi Partners
• IPO
• Exit
• Consumer
• Sequoia Capital
• TMT