IDG joins take-private consortium for China's Sungy Mobile

Yuqiang Deng, Sungy's founder, chairman and CEO, and co-COO Zhi Zhu submitted an offer in April of $4.90 per share for all outstanding American Depository Shares (ADS). Several IDG-managed funds, including two set up with Accel Partners, have now joined the consortium, according to a filing.

Deng already owns around 42% of Sungy's issued and outstanding ordinary shares on a converted basis. Combined with IDG's existing holding, the consortium has a 67.8% interest in the target. China Broadband Capital is listed in the 2014 annual report as having a 10.9%. WI Harper and Jafco are no longer listed among the principal shareholders.

Sungy went public in November 2013, raising $78.54 million in its IPO after pricing shares at $11.22 apiece. The stock jumped 19% on debut. Sungy touched $30.00 in March of last year but has since fallen off dramatically. It closed at $4.68 on May 20, down 67% on a one-year basis.

The company recorded revenue of RMB369.2 million ($59.4 million) for 2014, up from RMB328.8 million the previous year, but R&D, marketing and general expenses more than doubled. Sungy swung from a net income of RMB91.8 million in 2013 to a net loss of RMB47.7 million last year.

Responding to the disappointing earnings, Deng said the slowdown was the expected result of a temporary shift in focus from monetization to marketing and product development, with a view to strengthening and expanding the user base and product portfolio. "We believe that these initiatives have begun to take hold but will require some time before bearing fruit," he added.

Sungy's platform product, GO Launcher Ex, launched in 2010 and had attracted approximately 268 million users worldwide as of December 2013. The apps that run off this platform are designed to improve smart phone functionality and performance and aid personalization. In addition to the GO platform and products, Sungy operates a mobile internet portal and mobile reading services.

In February 2014, the company acquired GetJar, a VC-backed US mobile ad network. GetJar started out as an app store but later pivoted into an Android app recommendation service.

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