Lizhi, a China-based podcast app developer that counts consumer electronics producer Xiaomi as an investor, raised $45.1m after pricing 4.1 millions American Depositary Shares (ADSs) at $11 on Friday.
The company issued the ADSs, each representing 20 ordinary shares, on the Nasdaq Global Market on Friday. They briefly rose to $15.25 before closing at $11.63 on the first day of trading, giving Lizhi a market capitalisation of approximately $532m.
Lizhi had initially filed to raise up to $100m in October 2019, but subsequently set the price range for the IPO at $11 to $13.
Founded in 2013, Lizhi operates a user-generated audio platform that allows users to create, share and monetise podcasts. It now has 5.9 million monthly active content producers and its content has been played more than 48.9 billion times over the past two years.
The company relies on artificial intelligence technology to assist with the creation of compelling content and to help source podcasts aligned with a user’s personal tastes.
IPO proceeds will go toward product development and the enhancement of its AI technology, as well as international expansion efforts. Lizhi launched local versions of its platform in the Middle East and Africa in 2019 and will now expand across Southeast Asia.
The company secured $32m in series D funding from Cyber Dreamer, a vehicle for private investor Lam Lai Ming, in August 2017, adding $5m in series D1 capital the following month from Evolution Media China, part of Evolution Media Partners, the investment firm backed by talent agency CAA.
Xiaomi participated in a series C round in 2015 for Lizhi that was reported as being $20m in size, though the prospectus only gave details of $16.1m in funding. Morningside Ventures, Matrix Partners China and Shunwei Capital also took part in the round.
Matrix Partners China and Morningside Ventures had supplied $3.5m in series B funding for the company the year before, adding to $1m in series A financing supplied by Morningside in 2011.
Matrix Partners China remains the company’s largest shareholder following the offering, with a 19.8% stake, down from 21.9%. Its pther notable shareholders include Morningside Ventures (19.4% post-IPO) and Cyber Dreamer (12.1%).
Citigroup Global Markets, Haitong International Securities, AMTD Global Markets, Needham & Company, Tiger Brokers (NZ), Prime Number Capital, China Merchants Securities (HK) and Valuable Capital are underwriters for the IPO. They have 30 days to buy up to 615,000 additional ADSs which would lift the IPO to $51.9m.
