VC-backed China photo app provider raises $629m in Hong Kong IPO
Meitu, a Chinese photo and community app provider driven by the selfie phenomenon, raised HK$4.88 billion ($629 million) in its Hong Kong IPO, securing liquidity events for several venture capital investors.
The company sold 574 million shares at HK$8.50 apiece, the bottom of the indicative range, according to a filing. None of the existing institutional backers sold any shares in the offering. IDG Capital Partners now holds a 7.7% stake in Meitu, while Qiming Venture Partners has 6.61%, Tiger Global Management has 9.46%, and a vehicle controlled by ChinaAMC Asset Management has 6.01%.
Qiming first invested in Meitu in 2012. A Series A round of $60 million came in January 2014 from Innovation Works, IDG and Qiming. This was followed by $114.5 million in Series B funding in May 2014, with participation from Tiger Global, H Capital, Ceyuan Ventures, IDG and Foxconn Technology Group.
Meitu's Series C round in January 2015 saw ChinaAMC, Tiger Global, Foxconn, IDG, Qiming and H Capital contribute $190 million, while in April of this year Foxconn, Keywise Capital Management, China Merchants Securities and Harvest Investment Management, among others, contributed $136 million in Series D funding.
Founded in 2008, Meitu offers a portfolio of photo and social apps that have been activated on more than 1.1 billion unique devices in China and overseas as of October. In that month alone, the company's apps had 456 million users, approximately six billion photos were generated across the core photo apps, and over half of all photos posted on major social networks in China were processed by Meitu apps.
In 2013, the company launched Meitu smart phones specifically designed for selfie-taking. It represented the first major monetization effort and now smart phones contribute the vast majority of overall revenue. Online advertising, e-commerce and internet value-added services are also seen as avenues for monetization.
Revenue came to RMB741.8 million ($107.4 million) in 2015, up from RMB488 million a year earlier. Net losses widened to RMB2.22 billion from RMB1.77 billion over the same period.
Morgan Stanley, Credit Suisse and China Merchants Securities were joint global coordinators, bookrunners and lead managers for the IPO.
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