Lizhi, an Interactive Podcast Platform, Announces Terms for $61 Million Public Offering

China's Lizhi hopes to beat rival Ximalaya FM in the race to IPO, scheduled for next week.

Belinda Zhou
    Jan 09, 2020 12:30 PM  PT
Lizhi, an Interactive Podcast Platform, Announces Terms for $61 Million Public Offering
author: Belinda Zhou   

One of China's largest interactive podcast platforms, Lizhi Inc., has set the expected price range for its initial public offering scheduled for next Friday in New York.

The Guangzhou-based company said in its amended prospectus filed Wednesday with the U.S. Securities and Exchange Commission that it is offering 4.1 million American depositary shares priced at between $11 and $13 apiece. 

Lizhi would raise $61.3 million at the top of the expected range, down from the $100 million the company targeted in November filings.

The ten-year old company operates a mobile audio platform for user-generated content. It allows users to create, store, share and discover audio tracks, as well as interact in real-time.

The company said its mission is "to enable everyone to showcase vocal talent." 

For the years 2017 and 2018, Lizhi reported revenue of $66 million and $116 million, respectively. Net loss was $22 million and $1 million for the respective periods, according to the filing. In the nine months through September 2019, it posted revenue of $114 million on losses of $15 million.

Lizhi's audio community counted 46.6 million average monthly active users (MAUs) in the third quarter of 2019, an increase of 27% year-over-year.

Citing Chinese market research firm iResearch, Lizhi said it was the largest interactive audio entertainment platform in China in terms of average total monthly active users for the nine months through September.

"The market opportunity for podcasting in China appears significant and is expected to grow markedly in the medium-term, so the firm enjoys favorable industry dynamics," CW columnist Donovan Jones, the founder of VentureDeal, wrote in his analysis of Lizhi in November.

Lizhi said it intends to use 40% of the new funds to develop innovative products, 30% to invest in AI technologies and 10% to expand overseas business.

Citigroup Global Markets Inc. is acting as the representative underwriter, while Credit Suisse Group AG exited the deal. Three new underwriters including AMTD Global Markets Ltd., China Merchants Securities (HK) Co., Ltd. and Prime Number Capital LLC, have joined Citigroup, Haitong International Securities Group Ltd., Needham & Company, LLC and Tiger Brokers (NZ) Ltd., according to the filings.

The company has applied to list on the Nasdaq Global Select Market under the ticker symbol "LIZI." It is expected to lift off in trading on Friday, Jan. 17.

Earlier, Caixin Global reported that Lizhi's rival, Ximalaya FM, is also eyeing a U.S. IPO in 2020. The news agency said Ximalaya, which boasts serving 600 million listeners, seeks to raise up to $1 billion in an IPO that was postponed since 2018.