Ruhnn Holding, an Alibaba-backed Chinese e-commerce platform for social media influencers, has filed for a Nasdaq initial public offering (IPO) seeking to raise up to $200 million, according to its prospectus.
The $200-million figure is likely a placeholder and may change. The filing does not specify the number of American Depositary Shares that Ruhnn plans to offer. It has named Citigroup Global Markets and UBS Securities as joint bookrunners for the deal.
In the papers it filed at the US SEC, Ruhnn claims to be the largest internet key opinion leader (KOL) facilitator in China based on 2018 revenue. As of December last year, the company had 113 signed KOLs with an aggregate of 148.4 million fans across major social media platforms in China.
KOLs, also known as influencers, are individuals who have the “power to engage and impact people” within a specific community or field, such as fashion, culture, entertainment, and gaming.
“We created a KOL ecosystem in China by connecting a large number of KOLs and their fans to create a vast network and connecting this network to a large number of businesses, including brands, online retailers, designers, manufacturers and suppliers, based on existing e-commerce and social media platforms in China, to create value for participants in the ecosystem,” the company said.
Ruhnn has some ties with China’s biggest e-commerce company, Alibaba Group Holding Ltd. Alibaba’s retail platform, Taobao China Holding Ltd, holds a stake of 8.56 per cent in Ruhnn, while one of its directors, Pen Hung Tung, serves as Alibaba’s chief marketing officer.
The company has two revenue streams – product sales from sales of various fashion and lifestyle products to consumers through its KOL online stores under the full-service model; and service revenues from the provision of various KOL sales and advertising services to brands, online retailers and other merchants under the platform model.
The company booked $157 million in sales for the 12 months ended Dec. 31, 2018. It plans to list on the Nasdaq under the symbol RUHN. Ruhnn Holding filed confidentially on October 19, 2018.
According to a study cited by Ruhnn, China’s internet KOL economy, which refers to all activities relating to the monetization of the KOLs’ influence and impact on their fans, grew at a compounded annual growth rate of 181.5 per cent from 2013 to 2017. The KOL economy is expected to continue expanding at a CAGR of 41.8 per cent from 2017 to 2022.
Ruhnn said the funds from the IPO will be used for the pursuit of additional monetization channels and strategic investments, identifying and training KOLs, technology, and general corporate purposes, according to the prospectus.