Aurora Mobile Ltd. (Nasdaq: JG) made its debut on Wall Street, completing an initial public offering on Thursday and raising $77 million as it seeks to compete with China’s Big Three in the big data solutions industry.
The company, also known by its Chinese name “Jiguang,” ended its Day One at $8.80 per American depositary share, 30 cents higher than the offering price of $8.50. The offering was a reduction from the $200 million IPO that Aurora first applied for in June.
The stock of Aurora closed at $8.80 per share, up 30 cents, on its opening day.
(Source: Thomson Reuters Eikon)
More important than the overall among raised, said Aurora’s chief financial officer, Shan-Nen Bong, was the fact the company achieved the status of a publicly traded stock.
“From here, there are a lot of things we can do,” Bong told CapitalWatch directly after the company completed its IPO.
Bong, speaking from New York, said the company was in dire need of data scientists to help mine the “humongous” amount of data collected by Aurora. The status of being publicly listed would reduce the skepticism that some professionals in the data industry, as well as potential customers, might have felt toward it previously, he added.
Aurora aggregates real-time mobile behavioral data to help its clients make business decisions. The company's data solutions include targeted marketing, financial risk management, market intelligence, and location-based intelligence. The company uses artificial intelligence and machine learning as key components of its technology.
Push notifications, the company’s main developer service, which Bong called its “bread and butter,” recently held 53.8 percent of China’s market share. As of March 31, 700,000 applications in China were using Aurora’s push services.
“We pushed like 7 billion messages a day in the first quarter of this year, 7 billion!” Bong said. Given its volume, Aurora has surpassed China’s Big Three: Baidu Inc. (Nasdaq: BIDU), Tencent Holdings Ltd., and Alibaba Group Holding Ltd. (NYSE: BABA) in the country’s data solutions market.
“Their market shares are single-digit, so in this service we are the leader,” Bong said.
Regarding other competitors in the field, Bong said Aurora was the only company that combines several services on its platform and creates anonymous user profiles based on “huge amounts of data” collected from cellphones to help its client better target their audiences.
In its prospectus, Aurora said that by the end of 2017, the number of monthly active mobile devices it reached had grown to 864 million, or 90 percent of the mobile gadgets in China. In the quarter ended March 31, that number rose to 925 million.
Bong also noted that Aurora complies with China’s data privacy laws.
“We don’t collect your phone book, we don’t collect your notes, your pictures - we only collect your online behavior. The data we collect is fully authorized by the developer, and also the user.”
Aurora gathers statistics on when a cellphone user downloads, opens, or deletes an app, and analyzes a user’s age, gender, and location without linking to individual data.
Bong said 50 percent of the proceeds of the stock sale would fund further development of Aurora’s technology infrastructure for its growing collection of data. As for the rest, he said the company was looking to recruit data scientists and possibly acquire businesses along its value chain.
Aurora reported that, in the first quarter of this year, the number of customers increased to 1,348 from 980 a year ago. Revenue during the same period soared 295 percent to $20.2 million with its net loss of $3.5 million staying level year-over-year.
Overall, Aurora's revenue was $45.4 million in 2017, a 305 percent increase from a year earlier. The company's loss last year widened by 47 percent to $14.4 million.
Among Aurora's partners, the company listed tech firm Sina Corp. (Nasdaq: SINA), as well as search engine, Baidu Inc. (Nasdaq: BIDU), Starbucks Corp. (Nasdaq: SBUX), and Yum China Holdings Inc. (NYSE: YUMC), which owns the rights to KFC, Pizza Hut, and Taco Bell in China.
According to research by Frost & Sullivan, cited in Aurora's prospectus, China's mobile internet users are projected to increase to 972.6 million in 2023 from 752.7 million in 2017. The number of mobile apps is expected to grow to 3.3 million in five years, representing 50 percent growth from 2017.
Aurora's co-founder, chairman, and chief executive officer, Weidong Luo,
and Fei Chen, co-founder and president, at the company's IPO Thursday
(Source: Aurora Mobile)
Bong said the company’s position in the market has improved since its inception as corporations increased their advertising spending. Aurora’s services now cover “just the tip of the iceberg,” as data collection opens “wonderful” possibilities, he added.
“In five to 10 years, we see ourselves offering data solutions that nobody else can just because we have so much data that we still need to mine.”