Douyu, a China-based video game livestreaming platform operator backed by internet group Tencent, yesterday filed an updated prospectus to restart its initial public offering proceedings in the US.
The company has set its price range at $11.50 to $14 per American Depositary Share (ADS). It plans to issue 44.9 million new ADSs, in addition to 22.5 million of existing stock to be sold be existing shareholders, putting potential proceeds at $775m to $944m.
Douyu had originally planned to launch its roadshow two months ago, but decided to delay in the midst of market jitters caused by US tariffs imposed on Chinese imports.
At the time, the company was targeting up to $500m in proceeds and planned to list on the New York Stock Exchange, but has now chosen the Nasdaq Global Select Market instead.
Founded in 2014, Douyu has built a livestreaming platform focused around online games and eSports events. It counts more than 159 million monthly active users and made a net profit of $5m in the first quarter of 2019, after suffering a $122m net loss last year.
The proceeds have been allocated to offering additional premium eSports content and expanding into other genres, research and development, marketing activities and working capital.
Douyu has obtained approximately $1.1bn in equity financing to date. Tencent, Nashan Capital and, reportedly, game developer Zeus Interactive took part in a $73.7m series B round in 2016, investing alongside venture capital firm Sequoia Capital.
Tencent subsequently participated in a $166m series C round later that same year, together with Shenzhen Capital Group and China’s National SME Development Fund. Tencent returned once more in March 2018 to inject approximately $631m in funding.
Tencent is the largest shareholder in Douyu, holding a 43.1% stake that will be diluted to 37.2%. Co-founder and co-chief executive Shaojie Chen owns 15.2%, which will be reduced to 13.1%.
Other notable shareholders include Sequoia (which will see its stake diluted from 10.5% to 9.1%) and Phoenix Fuju (from 6.5% to 5.6%).
Aodong Investments will sell approximately 1.9 million shares in the offering, to see its stake go from from 9.6% to 2.4%. Co-founder and co-CEO Wenming Zhang will sell approximately 345,000 shares to reduce his shareholding from 3.2% to 1.2%.
Morgan Stanley, JPMorgan, Bank of America Merrill Lynch and CMB International Capital have been hired as book-running managers for the proposed offering.
