China-based news aggregation platform Qutoutiao filed on Friday for a $300m initial public offering on the Nasdaq Global Market that will allow internet group Tencent to exit.
Founded in 2016, Qutoutiao operates a mobile app that aggregates news content according to a user’s personal tastes, focusing on a fun, light-hearted approach. It has 17.1 million daily active users and is the second most popular such platform in China, after Toutiao.
The company made a $77.7m net loss in the first six months of 2018 but increased revenue almost sevenfold year on year to $108m in the same period. It plans to put the IPO proceeds into technology development, expanding its app, and increased marketing and promotion.
Tencent owns a 7.8% stake in Qutoutiao through a vehicle called Image Flag Investment, having led a $200m series B round for the company in March 2018 at $1.6bn post-money valuation, according to AVCJ.
Smartphone maker Xiaomi, Shunwei Capital, Advantech Capital, China InnoVision Capital, Shanghai Chuangban Investment Management and Lighthouse Capital Group also participated in the series B round, with Tencent reportedly investing as an existing backer.
Qutoutiao’s largest shareholders are Innotech Group Holdings (39%), Qu World (13.7%) and News Optimizer (10.2%), representatives of co-founder and chairman Eric Siliang Tan, co-founder and CEO Lei Li and a trust called Core Trust Company respectively.
Citigroup Global Markets, Deutsche Bank Securities, China Merchants Securities (HK), UBS Securities and KeyBanc Capital Markets have been appointed underwriters for the offering.