China-based social marketing services provider Ruhnn secured $125m yesterday in an initial public offering on the Nasdaq Global Select Market that qualified as an exit for e-commerce group Alibaba.
The company issued 10 million American depositary shares (ADSs), each representing five ordinary shares, priced at $12.50 each, in the middle of the IPO’s $11.50 to $13.50 range. The IPO valued it at $413m and social media company Weibo bought $8m of shares in the offering.
Founded in 2016 as Hanyi E-Commerce, Ruhnn oversees a network of social media influencers with a combined 148 million followers, providing training and connecting them to commercial partners for marketing opportunities.
The company will use the IPO cash for strategic investments as it looks to expand its monetisation options, in addition to signing up new influencers and enhancing its technology capabilities. It made a net loss of about $8.4m in the final nine months of 2018 from $125m in revenue.
The round comes after $88.9m in funding from unnamed investors in October 2018, according to the IPO prospectus.
Taobao, an e-commerce platform owned by Alibaba, and Shanghai Yuanqiong Enterprise Management, a subsidiary of tobacco and clothing producer Septwolves, had 8.6% stakes that were diluted to 7.5% in the offering. Ruhnn’s other main shareholders are all entities representing executives or influencers.
Underwriters Citigroup Global Markets, UBS Securities and Top Capital Partners have the 30-day option to buy another 1.5 million ADSs, which would take the size of the IPO to almost $144m. Ruhnn’s shares closed at $7.85 yesterday on their first day of trading.
