Liulishuo, a China-based English-teaching platform backed by media group Hearst, has listed on the New York Stock Exchange after raising $71.9m in its initial public offering.
The company issued 5.75 million American Depositary Shares (ADSs) priced at $12.50 each, after initially filing to raise $100m last month. Its shares opened at $13.37 on Thursday but by yesterday’s close had dropped back down to $12.08.
Incorporated in 2012 as Laix, Liulishuo has developed an interactive English language learning course that uses artificial intelligence to assess students’ spoken and written skills. It claimed to have served a total of 83.8 million users by the end of June this year.
The company will use the proceeds from the offering for research and development activities, with a particular focus on improving its artificial intelligence and big data capabilities, and for sales and marketing efforts.
Liulishuo raised $54m in a July 2017 series C round, according to the IPO prospectus, though it claimed at the time to have secured $100m. The round was co-led by China Media Capital and Wu Capital and featured Hearst Ventures, a corporate venturing unit owned by Hearst.
Trustbridge Partners, IDG Capital, GGV Capital and Cherubic Ventures also contributed to the series C round, which followed a $29.8m series B in 2015 also backed by Hearst Ventures, as well as Trustbridge, IDG-Accel, GGV, RTA Capital and Cherubic.
Liulishuo had previously received $10m in a 2014 series A round and $1.5m in seed funding in 2013, but it has not revealed details of the participants in those rounds.
GGV Capital held an 11.7% stake before the offering but purchased 800,000 shares to increase its shareholding to 12%. China Media Capital, which had owned 6.3%, bought 180,000 shares to retain a 5.9% stake.
IDG Capital and Trustbridge each owned a 13.7% stake that was diluted to 11.8%. The other shareholders with stakes of 5% or more are exclusively offshore vehicles for company directors.
Morgan Stanley and Goldman Sachs were the underwriters for the offering. They have been granted a 30-day option to purchase approximately 863,000 more ADSs, which would boost the IPO to almost $108m.
