VC-backed Huya gains on US trading debut after $180m IPO

The company sold 15 million American Depository Shares (ADS) at $12 apiece, the top end of the indicative range, according to a filing. The stock peaked at $16.74 on May 11 before falling back slightly to close at $16.06.

YY is the controlling shareholder in the business post-offering with a stake of 44.5% and over half the voting power, while Tencent has 34.6%. The internet giant provided $461.6 million in Series B funding for Huya in March, which included an option to take a majority voting interest in the company.

Last year, the company received a $75 million Series A round led by China Ping An Insurance, which contributed $22.5 million. Banyan Capital, Engage Capital, and Morningside Ventures also took part, investing $5 million, $8 million, and $4.5 million, respectively.

YY began branding its gaming services as Huya in 2014. Huya now claims to be the largest and most active game live streaming community in China, based on average monthly active users (MAUs) – it had 38.8 million in the fourth quarter of 2017 – and time spent on the app. It covered 2,600 different games as of December 2017, working with game developers and e-sport event organizers.

The platform allows real-time interaction between viewers and broadcasters, resulting in viewer-generated content that is intended to add to the entertainment experience. Huya monetizes its user base through advertising and the sale of virtual gifts.

China is the largest global market for online gaming and live streaming services. It had 646 million gamers in 2017, including 229 million e-sports participants. These numbers will reach 917 million and 537 million, respectively, by 2022, according to Frost & Sullivan. In addition, MAUs of live streaming services are expected to rise from 279 million to 518 million.

Game live streaming revenue stood at just $121 million in 2015. It reached $1.2 billion last year and is set to hit $4.9 billion by 2022. Over the same period, the number of game live streaming MAUs is projected to rise from 180 million to 349 million.

Huya posted revenue of RMB2.18 billion ($335.8 million) in 2017, up from RMB796.9 million the previous year. Meanwhile, the company's net loss narrowed from RMB625.6 million to RMB81 million.

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• Topics
• Greater China
• Technology
• Consumer
• IPO
• China
• TMT
• Morningside Technologies
• Banyan Capital
• Ping An
• Tencent