VC-backed internet celebrity incubator files for US listing

The Hangzhou-based company operates a platform that promotes young online personalities and entrepreneurs by helping them become influential figures on Chinese social media platforms. These figures, known as key opinion leaders (KOL), attract followers by live-streaming their daily lives and recommending products such as clothing and cosmetics to their fans, primarily millennial women.

Founded in 2001, Ruhan mainly generates revenues through charging fees from brands and online retailers that want KOLs to promote their products. Additional revenue is generated through the sale of products via online stores that operate under the names of the KOLs. The company has 113 KOLs with a combined 148 million followers.

Revenue came to RMB947 million ($137.8 million) for the 12 months to March 2018, according to a prospectus. For the nine months ended in December 2018, the company generated RMB854 million. It incurred net losses of RMB90 million and RMB58 million for the two periods, respectively, due to high costs for product sales and promotion.

Min Feng, one of the co-founders of Ruhan, is the largest shareholder with a 29.27% stake prior to the listing. Legend Capital holds an 8.54% stake while Taobao China, an e-commerce company that controls the social media platform Weitao, holds 8.56%.

Ruhan has reportedly gone through three rounds of funding. These include SAIF Partners investing in a Series A round in 2014 and re-upping in a RMB12 million round the following year that was joined by Legend, Chinese VC Telescope, and Beijing Kunlun Technology. A further RMB430 million was raised in 2016 from Alibaba Group, Legend and Goldstone Investment. Ruhan listed on China’s New Third Board in 2016 but withdrew in 2018.

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• Topics
• Greater China
• IPO
• Technology
• China
• Technology
• IPO
• Legend Capital
• TMT