China-based search engine operator Sogou is looking to float in the US in an intial public offering that would provide exits for internet companies Tencent and Sohu, Bloomberg reported on Tuesday.
The company intends to issue about 10% of its shares in an IPO that will likely take place later this year, and which could value the company at up to $5bn, chief executive Wang Xiaochuan told Bloomberg.
Sogou was formed as a subsidiary of Sohu before Tencent paid $448m for a 36% stake in the entity in 2013, merging it with its own internet search subsidiary, Soso.
The company’s service was the third most popular Chinese search engine in Q3 2016, behind Baidu and Shenma, which is backed by e-commerce firm Alibaba, according to research firm iiMedia.
Proceeds from the offering would be used to invest in artificial intelligence and machine learning technology developers with a view to improving Sogou’s search results.
Referencing regulatory restrictions that impacted Baidu in 2016 following a controversy over on medical advertising, Wang told Bloomberg: “Over the past year, we have seen a trend where people are finding themselves not trusting Baidu as much and some are even seeking a replacement.
“So over the next year or two, as more people feel more comfortable with Sogou they will realise it is able to replace Baidu.”
Although Wang said he hopes to launch the offering this year, Sogou has not hired banks and Sohu told Bloomberg an IPO for Sogou is not currently on the agenda.