China-based social networking platform Momo has raised $216m from an initial public offering on Nasdaq, issuing 16 million American depositary shares (ADS), each representing two ordinary shares, priced at $13.50 each.
The company concurrently has sold $50m in shares to e-commerce company Alibaba and $10m to classified advertising website 58.com in a concurrent private placement.
Momo had raised about $280m in funding prior to the offering, including $30.7m from Alibaba. Momo will invest $80m of the IPO proceeds in research and development related to its technology infrastructure, and a further $100m on sales and marketing efforts.
Alibaba holds a 20.8% stake in Momo, up from 20.7% pre-IPO. Founder Yang Tan remains the company’s largest principal shareholder at 26%, down from 29.2%, while Matrix Partners holds a 17.7% stake post-IPO, Yunfeng Capital 5%, Sequoia Capital 5.6% and co-founder Yong Li 4.5%.
Morgan Stanley, Credit Suisse Securities, J.P. Morgan Securities and China Renaissance Securities served as underwriters. They have been granted a 30-day option to buy an additional 2.4 million ADSs, which would increase the proceeds to $266.8m.
Momo’s shares on Nasdaq briefly rose to $17.02 each on the first day of trading, but have since dropped to $14.46. The company has a market cap of $474.8m as of the time of writing.