36Kr, a China-based media and startup services group backed by financial services firm Ant Financial and publisher Nikkei, priced its shares at the bottom of its range at $14.50 on Thursday.
The company reduced the number of American Depositary Shares it issued from a planned 3.6 million to 1.4 million, raising $20m in proceeds – a fifth of its targeted $100m. Shares dropped 10% on the first day of trading on the Nasdaq Global Market on Friday, closing at $13.06.
Founded in 2010, 36Kr has built a diversified business that includes technology news portal 36Kr Media and co-working spaces provider Kr Space. It also provides fundraising services for startups.
The company confirmed in its prospectus that it was yet to secure an internet news service licence from the Chinese government, noting that this may expose it to administrative sanctions that could materially or adversely affect its business.
Nikkei most recently contributed to a $24m series D round together with Lotus Walk, Krystal Imagine Investments, Red Better and Homshin Innovations in September 2019.
Ant Financial injected an unspecified sum in 2015, then also described as a series D round, together with Huatai Securities Company and Matrix Partners.
Runzhi HK, Oasis Angel, Falcon Investment Holdings, Nova Compass Investment, China Prosperity Capital Alpha, Greentech Tianhong Investment and Sparkle Roll Culture & Entertainment Development provided $38.7m in funding in January 2018.
Ant Financial also took part in a $51m series B round closed in 2016 alongside M36 Investment, Neo TH Holdings, Themisclio, Zhanjin Management Consulting Center, Yunli Hefeng Management Consulting Center, Spright KR and Hongtu Capital Investment.
Proceeds from the initial public offering will go towards the continued development of 36Kr’s content offerings and allow the company to bolster its data analytics and technology capabilities. It will also expand its business service scope, customer base and extent of its services.
Ant Financial held a 16.8% stake in 36Kr ahead of the offering, which has been reduced to 16.2%.
Other notable shareholders include Tembusu (10.8% post-IPO), chief executive Dagang Feng, who sold some 41 million shares (17.9%), China Prosperity (7.6%), Jiuhe Yunqi (7%), M36 (6.7%) and founder Chengcheng Liu, through 36Kr Heros (6.3%).
Credit Suisse Securities, China International Capital Corporation, AMTD Global Markets, Needham & Company and Tiger Brokers (NZ) are acting as underwriters for the offering.
The underwriters were originally allocated 207,000 for their 30-day over-allotment option, though it is unclear whether the reduced number of shares issued has any impact on this.
