Alibaba, Yunfeng join take-private bid for China's Momo

The company listed on NASDAQ as recently as December 2014 - having raised $248 million in its IPO - creating a liquidity event for VC and PE backers Matrix Partners, Sequoia Capital and Yunfeng. Alibaba, another existing investor, purchased additional shares in a private placement concurrent with the public offering.

After a strong opening, the stock dipped below its IPO price of $13.50, rebounding in late May of last year, a few weeks before Yan Tang, Momo's co-founder, chairman and CEO, submitted a take-private bid. The offer of $18.90 per share for all outstanding American Depository Shares (ADS) represented a 20.5% premium to the June 22 closing price.

Matrix, Sequoia and Huatai Ruilian Fund Management supported the bid, which meant the consortium held 47.8% of the total shares and - given Momo's dual share structure - 84.1% of the voting power. Alibaba and Yunfeng joined the consortium on April 5, according to a filing. Momo shares have since gained more than 30%, closing at $16.31 on April 7.

Momo, which is best known for its "flirting" function, launched in August 2011 and racked up 10 million users within 12 months. As of March 2015, it had 78.1 million monthly active users. The Momo app is downloaded free of charge and the company generates most of its revenue from subscription packages that include additional functions and privileges. Other revenue comes from mobile games, paid emoticons and marketing services.

Overall revenue reached $44.8 million in 2014, up from $3.1 million the previous year. Net losses reached $25.4 million, compared to $9.3 million and $3.8 million in 2013 and 2012, respectively.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Greater China
• Buyouts
• Technology
• Matrix Partners
• Alibaba Group
• Yunfeng Capital
• Sequoia Capital
• TMT