Douyu, a China-based video game livestreaming platform operator backed by internet group Tencent, priced its shares at the low end of its range at $11.50 on Tuesday to raise $775m in its initial public offering.
The company issued 44.9 million new American Depositary Shares (ADSs), in addition to 22.5 million of existing stock sold by existing shareholders, meaning $517m was raised by Douyu itself and the remainder went to exiting shareholders.
Douyu had hoped to price ADSs at up to $14 and raise as much as $944m in proceeds.
Shares dropped slightly to $11.40 on opening before reaching an $11.48 close yesterday. Douyu had initially hoped to list on the New York Stock Exchange two months ago, but delayed and altered those plans amid economic tensions between the US and China.
Founded in 2014, Douyu operates a livestreaming platform for online games and eSports events. The company has attracted more than 159 million active users and achieved a $5m net profit in the first quarter of this year, after making a $122m net loss in 2018.
The company will use proceeds to offer additional premium eSports content, expand into additional genres, drive research and development efforts and bolster marketing activities.
Douyu had raised approximately $1.1bn in funding ahead of the offering. Tencent, Nashan Capital, Sequoia Capital and, reportedly, game developer Zeus Interactive participated in a $73.7m series B round in 2016.
Tencent returned for a $166m series C round later that same year, investing alongside Shenzhen Capital Group and China’s National SME Development Fund. The corporate subsequently also supplied $631m in March 2018.
Tencent owned 43.1% in Douyu ahead of the listing that has been diluted to 37.2%. Co-founder and co-chief executive Shaojie Chen now owns 13.1%, down from 15.2%. Other notable shareholders include Sequoia (9.1% post-IPO) and Phoenix Fuju (5.6%).
Aodong Investments sold just over 1.9 million shares in the offering, reducing its stake from 9.6% to 2.4%. Co-founder and co-CEO Wenming Zhang sold approximately 345,000 shares and now owns 1.2%, down from 3.2%.
Morgan Stanley, JPMorgan, Bank of America Merrill Lynch and CMB International Capital are the book-running managers for the offering.
