Soulgate, a China-headquartered social media app developer backed by internet and gaming group Tencent, yesterday postponed an initial public offering set to take place on the Nasdaq Global Market.
The company set the range for the offering last week and planned to issue 13.2 million American depositary shares, each representing three ordinary class A shares, on the Nasdaq Global Market priced between $13 and $15 each. It would have raised $198m at the upper end.
Video game developer Miyoho had agreed to invest $80m in Soulgate through a concurrent private placement. Janus Henderson had expressed interest in purchasing up to $50m of shares in the offering and Boyu Capital’s Opportunities Master fund up to $30m.
Founded in 2015, Soulgate has built an online platform called Soul with more than 33 million monthly active users who can use it to interact with each other through avatars in a virtual environment.
The company made $74.8m net loss from $76.3m in revenue in 2020 and postponed the IPO due to alternative financing options becoming available, Reuters reported, citing a statement. It had intended to divide 80% of the IPO proceeds between sales and marketing and research and development.
Soulgate raised $26m from Genesis Capital, Apoletto Asia, Morningside Venture Capital, Lighthouse Capital and MFund in an April 2018 series B round, according to the IPO filing.
Genesis Capital, Morningside and Lighthouse Capital joined GGV Capital in the company’s $57m series C round in December the same year, before Tencent provided $135m in series D funding in May 2020.
Tencent holds 49.9% of Soulgate’s shares while founder, chairwoman and CEO Lu Zhang owns a 32% stake and Genesis Capital a 6% stake.
Morgan Stanley, Jefferies, BofA Securities, China International Capital Corporation Hong Kong Securities, Lighthouse Capital International, Futu and Tiger Brokers (NZ) were the underwriters for the offering.
