China’s largest online audio platform Ximalaya Inc. has kicked off an initial public offering (IPO) in Hong Kong, per a company filing with the Stock Exchange of Hong Kong on Monday.
Reuters had reported late last week that Ximalaya had shelved its plan to list in the United States, amid Beijing’s tightening regulatory scrutiny of US listings by Chinese tech firms. Ximalaya had filed for an IPO in the US in April aiming to raise about $500 million.
In the prospectus, Ximalaya didn’t disclose the Hong Kong IPO size.
Goldman Sachs, Morgan Stanley and the Chinese investment bank China International Capital Corporation Limited (CICC) are acting as joint sponsors.
Ximalaya plans to invest a large part of the IPO proceeds to enrich its content library and to incentivise content creators to produce quality content, especially the advancement of third-party IP partnerships, content licences, and content creators.
And, the rest will be used to shore up capacities such as next-generation technology, leadership, and operating efficiency.
Ximalaya, which started operations in 2012 and launched its flagship mobile app in 2013, aims to offer an immersive audio platform where content creators and users can communicate with each other.
Shanghai-based Ximalaya has the biggest market share in the industry. In the first half of 2021, its monthly active users (MAU) amounted to 262.1 million across its app, official website, and third-party platforms.
During the same period, its mobile app users spent a total of 847.8 billion minutes listening to its audio content, accounting for nearly 70.9% of total mobile listening time among all online audio platforms in the country, it said.
Chinese private equity firm Xingwang Investment and China market-focused investment firm Trustbridge Partner are the two largest external investors holding 10.72% and 7.46% stakes, respectively. Other majority shareholders include Chinese tech giants Tencent, Xiaomi, Baidu, and Japan’s Sony Music Entertainment, among others.
In 2018, Ximalaya had garnered 4 billion yuan ($620 million) in a Series E round from Goldman Sachs, Tencent Investment, General Atlantic, Huatai Securities, and Hong Kong-based New Horizon.