China-based social networking platform Momo set the range yesterday for an initial public offering on Nasdaq and will aim to raise up to $232m.
The company plans to issue 16 million American depositary shares, each representing two normal shares, priced between $12.50 and $14.50. E-commerce companies Alibaba and 58.com will buy $50m and $10m of shares respectively in a concurrent private placement.
Launched in August 2011, Momo is a social networking app focused on location-based services and used by many of its members to find dates or casual hook-ups. It has raised about $280m in funding, according to the filing, and Alibaba has invested approximately $30.7m.
Momo, which increased its membership base 160% year on year to 180 million through September this year, will use $80m of the IPO proceeds for research and development related to its technology infrastructure and a further $100m for sales and marketing.
Alibaba, which currently holds a 20.7% stake in Momo, will remain its largest external shareholder post-IPO, retaining a 20.4% share. Its other main shareholders are Matrix Partners, which will hold a 17.7% stake post-IPO, as well as Yunfeng Capital and Sequoia Capital, which will own 5% each.
Morgan Stanley, Credit Suisse Securities, J.P. Morgan Securities and China Renaissance Securities are serving as underwriters for the offering. They have the 30-day option to buy an additional 2.4 million ADSs, which could lift the proceeds as high as $266.8m.