Tuya, a China-based internet-of-things (IoT) technology provider backed by internet group Tencent, has priced its initial public offering to raise $915m, Bloomberg reported yesterday.
The company priced approximately 43.6 million shares at $21.00 each, above the IPO’s $17 to $20 range, and is set to float on the New York Stock Exchange.
Tencent has expressed interest in acquiring $100m of shares in the offering, a portion of a prospective $500m of share purchases by existing Tuya shareholders.
Canada Pension Plan Investment Board and one or more funds affiliated with Dragoneer Investment Group, GIC and funds affiliated with Tiger Global Management could buy $300m of shares while affiliates of Hillhouse Capital could take upwards of $100m.
Tuya provides an IoT platform that enables users such as original equipment manufacturers and systems integrators to create and produce their own smart products. It increased revenue 70% in 2020 to almost $180m and cut its net loss from $70.5m to $66.9m.
The IPO proceeds will go to research and development in addition to strengthening the company’s technology infrastructure, marketing and branding. It had raised more than $467m prior to the offering, according to the IPO filing (details here).
Tencent provided $170m in funding for Tuya in September 2019 and $80m last month. Its other investors include New Enterprise Associates (NEA), Global Bridge Capital, CMC Master Fund, Quadrille Capital, China Broadband Capital and a vehicle dubbed NVMB XIV Holdings.
The company’s stock prior to the IPO consisted of 519 million class A shares, the same as the shares being issued in the offering, and 559 million class B shares which appear to be primarily held by its executives. NEA owned 23.9% of Tuya’s class A shares pre-IPO while Tencent held 10.8%.
Morgan Stanley, BofA Securities, China International Capital Corporation Hong Kong Securities, Tiger Brokers (NZ) and CMB International Capital are the underwriters for the offering. They will have a 30-day option to buy almost 6.54 million additional shares, which could lift the size of the offering to over $1.05bn.
