Mobile Aggregator Qutoutiao Aims to Sell 16 Million ADSs at $9 Each
The Shanghai-based company, launched two years ago, said it expected to begin trading on the Nasdaq Global Market under the ticker symbol “QTT.”
Qutoutiao Inc., one of China's top mobile content aggregators, submitted an amended regulatory filing today in its bid to raise as much as $166 million, disclosing it planned to offer 16 million American depositary shares at a range of $7 to $9 each.
The Shanghai-based company, launched two years ago, said it expected to begin trading on the Nasdaq Global Market under the ticker symbol "QTT." Four ADSs are equivalent to one of the company's Class A ordinary shares. An additional 2.4 million ADSs could be sold through an over-allotment.
In its filing, Qutoutiao, which is heavily backed by Tencent Group Holdings Ltd. (HKEX: 0700), also disclosed that an affiliate of JD.com Inc. (Nasdaq: JD) was also interested in purchasing as much as $40 million worth of ADSs at the IPO price. No commitment, however, has been made regarding the transaction.
The company filed its initial registration statement with the Securities and Exchange Commission in mid-August. Today's amended filing added the number of shares and expected price range.
If successful, the IPO of Qutoutiao, the second-largest mobile news aggregator in China, is expected to value the company as high as $3 billion. In March, Tencent Holdings Ltd. led a pre-IPO investment of more than $100 million in the startup.
Through its flagship application, Qutoutiao, which means "fun headlines" in Chinese, the company aggregates articles and short videos and presents customized feeds to users based on their profile, behavior, and social relationships. While the content varies among a large range of topics, the site focuses primarily on humor, stories, and other light-minded content.
In particular, the company aims its content strategically to users from smaller cities and rural areas "because of the enormous opportunities in this underserved market," it said in its filing.
The company currently has 48.8 million monthly average users and 17.1 million daily average users who spend 55.6 minutes per day on the site.
And while the company continues to incur losses as it looks to expand its customer base, losing $77.7 million in the first six months this year, revenue has been growing steadily. The company reported revenue of just $8.8 million in 2016, the year the company was founded, $78.1 million last year, and $108.5 million this year through June 30.