Qiniu Limited, an Alibaba-backed Chinese cloud services platform for media and data applications, has filed for an initial public offering (IPO) on Nasdaq to raise as much as $100 million – likely a placeholder amount subject to change.
Shanghai-based Qiniu, which counts e-commerce giant Alibaba’s affiliate Taobao China as its biggest institutional shareholder with a 17.7% stake, has yet to reveal the pricing terms of the offering.
Qiniu’s listing plan comes as the loss-making firm recorded improved profitability in recent two years. In a prospectus filed with the US Securities and Exchange Commission (SEC) on April 29, the firm posted a 32% increase in revenues to nearly 1.1 billion yuan ($166.2 million) in 2020 from 825 million yuan in 2019. Its net loss narrowed 84.9% year-on-year, at 19.3 million yuan ($2.9 million) last year.
Founded in 2011, Qiniu serves clients including China Merchants Bank; Xiaohongshu, a Chinese social media and e-commerce startup also known as “Little Red Book;” edtech firm VIPKid; and online video site Bilibili.
Qiniu’s platform offers end-to-end intelligent media cloud and analytics solutions featuring data collection, storage, distribution, live streaming, and cloud-based data processing & analytics. It is China’s largest pure-play PaaS provider with a 4.4% market share by revenue in 2020, according to Frost & Sullivan, cited in its prospectus.
Having served over one million clients, Qiniu is tapping the public market for more firepower to help it capture opportunities in China’s public cloud service market. Frost & Sullivan estimates the market to reach 480.3 million yuan ($69.6 billion) by 2025, with a compound annual growth rate (CAGR) of 31.6% between 2020 and 2025.
“The deployment of 5G technology, the development of IoT and augmented reality (AR)/virtual reality (VR) technologies, and the proliferation of real-time interaction use cases” would further increase the demand for “powerful” cloud services and tools,” it said.
Matrix, Qiming as PE-VC investors
Before moving towards the US listing, Qiniu has completed at least six funding rounds. The firm raised its latest deal, a 1-billion-yuan Series F round, from investors including state-owned China Structural Reform Fund Corporation Limited, BOCOM International Holdings Company Limited, and Jumbo Sheen Group’s investment arm in June 2020.
Prior to that, it also closed a Series E round of 1 billion yuan in 2017 from Alibaba and Yunfeng Capital, a private equity (PE) firm co-founded by Alibaba’s Jack Ma; as well as a $100 million-plus Series D round in 2016 from F&G Venture, Harvest Capital Management, and other investors.
Followed by Alibaba, Xu Shiwei, Qiniu’s co-founder and CEO, is currently the firm’s biggest individual shareholder with an 18% stake. Matrix Partners China; EverestLu Holding Limited, which is owned by China Structural Reform Fund Corporation Limited; and Qiming Venture Partners hold 8%, 7.3%, and 6.8% shares in the firm, respectively.
Qiniu will use the IPO proceeds for R&D, investment in technology infrastructure, strategic investments & acquisitions, as well as other general corporate purposes, according to the prospectus.
The firm plans to list under the symbol “QNIU.” BofA Securities, UBS Investment Bank, Jefferies, Bocom International, Futu Securities, and Tiger Brokers are the joint bookrunners on the deal.