Babytree, a China-based social parenting media and e-commerce platform backed by corporates Alibaba, Fosun and TAL Education, will raise $217m in its Hong Kong initial public offering, Reuters reported on Wednesday.
The company has priced its shares at HK$6.80 ($0.90), settling at the bottom of a range that had HK$8.80 at the other end. Babytree had hoped to secure up to $1bn at a valuation of $3bn to $5bn, but its valuation instead dipped to $1.5bn, from $2.2bn in June this year.
Babytree has created an online community where parents can share their experiences, seek advice and find information such as a vaccination checklist and dietary guides for mothers. It also operates an e-commerce platform and a video sharing app called WeTime.
Alibaba invested $214m in Babytree in June through e-commerce subsidiary Taobao China, after diversified conglomerate Fosun had led a $450m round in 2016 that included education services firm TAL, Chenshan Capital, China Merchants Wealth and Matrix Partners.
Online cosmetics retailer Jumei provided $120m in convertible note financing for the company in 2015 but sold a 4% stake out of its 7.3% share to an unnamed investor in June this year. TAL had already injected $23.5m in 2014.
The IPO capital will enable Babytree to strengthen its market leadership through the development of its existing apps and website, and the creation of additional services such as the recently launched women’s fashion curation and distribution service Mizhi Fashion.
Proceeds will also go toward R&D efforts, with Babytree planning to focus on data analytics and international expansion activities.
Taobao China will purchase approximately 24.7 million shares in the offering through an anti-dilution option secured as part of its investment in June to maintain its current 9.9% shareholding.
Fosun currently owns a 24.8% stake through a subsidiary called Startree that will be reduced to 21.1%, while TAL’s 10.2% stake will be diluted to 8.7%.
Morgan Stanley Asia, UBS Hong Kong Branch, Haitong International Securities, China Merchants Securities (HK), Fosun Hani Securities, AMTD Global Markets, First Shanghai Securities and Sinomax Securities are the underwriters for the offering.
