Chinese content aggregator Qutoutiao Inc, which is backed by the country’s technology giant Tencent Holdings Ltd, is seeking to raise US$84 million in an initial public offering (IPO) in the U.S., much less than the US$300 million the company initially planned to raise.
The company offered the pricing of its IPO of 12 million American Depositary Shares (ADSs) at US$7 apiece, the bottom of the projected US$7 to US$9 price range. The pricing put the company’s market value at US$2.1 billion, said Chinese media citing people familiar with the matter.
Shanghai-based Qutoutiao initially planned to raise US$300 million in a float on the NASDAQ.
The content aggregator start-up Qutoutiao, which means "fun headlines" in Chinese, collects articles and short videos from professional media and freelancers, and then presents customized feeds to users on its namesake mobile application. These feeds are optimized in real time based on each user’s profile, behavior and social relationships through the application’s AI-powered content recommendation engine.
The company is the second largest mobile content aggregator in China, said the company’s prospectus. It said to have about 48.8 million monthly active users, and 17.1 million daily active users who spend more than 55 minutes on the platform every day.
The company ranks second among all the news apps in Apple’s Chinese App Store as of the writing, only after its biggest rival Toutiao, a Beijing-based news and information content platform.
Qutoutiao has close ties to Tencent, which was a lead investor in its series A financing round in January 2017 and series B financing round in March 2018.
Citigroup Global Markets, Deutsche Bank Securities, China Merchants Securities (HK) Co Ltd and UBS Securities and KeyBanc Capital Markets are the underwriters for the company’s American IPO.