Ximalaya, China's Top Audio Platform, Files for US IPO

The audio content platform is backed by Tencent Holdings and is led by serial entrepreneur Jianjun Yu.
CapitalWatch StaffMay 03,2021,15:53

Ximalaya Inc., China’s largest online audio platform backed by Tencent Holdings (OTC: TCEHY; HKEX: 0700), has filed to trade its American depositary shares on the New York Stock Exchange.

Ximalaya providers audio content for listeners across all age groups. Based in Shanghai, the company counted 250 million average monthly active users in the first quarter of 2021 across all its channels. Its flagship Ximalaya app, meanwhile, ranked top among all Chinese audio platforms in several parameters, according to China Insights Industry Consultancy (CIC).

In 2020, about 75% of total mobile listening time among all online audio platforms in China was spent on content provided by Ximalaya, CIC reported, as cited by the prospectus.

The company has seen fast growth since 2018, though it has yet to turn profitable. In the three months through March, Ximalaya booked $176.3 million in revenues, up 65% year-over-year, on net loss of $40.8 million. For the full year 2020, the company posted revenues of $620.7 million on losses of $92.7 million.

Ximalaya monetizes on subscription, ads, livestreaming, education services, and other services. In the first quarter, Ximalaya counted 13.3 million average paying members. Monthly subscription to Ximalaya costs at or below 25 yuan ($3.8), while annual was at up to 268 yuan ($41.1), depending on the package. It also offers bundle memberships from time to time in partnership with Tencent Video, iQiyi (Nasdaq: IQ), Youku, Meituan (OTC: MPNGY; HKEX: 3690) and JD.com (Nasdaq: JD; HKEX: 9618).

Notably, Ximalaya has struck partnerships with some major car brands to provide in-car audio. These include Tesla China (Nasdaq: TSLA), Mercedes-Benz (OTC: DMLRY), BMW (OTC: BMWYY), Audi, Geely (OTC: GELYF; HKEX: 0175), and BYD (OTC: BYDDY; HKEX: 1211), according to the prospectus.

Tencent and General Atlantic have been among the early backers of Ximalaya. The company also has ties to Xiaomi Corp. (HKEX: 1810) – XIMA’s co-chief financial officer, Steve Lin, served as the tech giant’s director of corporate finance and company secretary; he also served with Mckinsey & Company, Macquarie Capital Securities, and Deutsche Bank Group. Ximalaya has been providing ads services to Xiaomi.

As to Jianjun Yu, the co-founder, CEO, and chairman of Ximalaya, he is a serial entrepreneur, founder of City8.com and Shanghai Jietu Software Technology Co., Ltd.

Ximalaya said it plans to invest new capital in new technology, including AI and big data. A quarter of the proceeds will fund new content, another quarter will be used for marketing and branding, and a portion will go toward potential acquisitions, working capital, and general corporate purposes.

The company has set $100 million as a placeholder IPO target; the exact deal size has yet to be finalized. In 2018, PitchBook valued Ximalaya at $3.71 billion.

Goldman Sachs (Asia) LLC, Morgan Stanley & Co. LLC, BofA Securities, Inc. and China International Capital Corp. Hong Kong Securities Ltd. are securing the IPO.

Ximalaya plans to become publicly traded under the ticker symbol “XIMA.”

On Monday, the stock in a smaller Chinese podcast platform, Lizhi Inc. (Nasdaq: LIZI), tumbled 4% intraday to $5.85 per share.

Topics:Ximalaya, XIMA, Lizhi, IPO