Tencent owns almost half of the social media platform developer, which had revealed its intentions to go public earlier this year.
China-based social media platform developer Soulgate has filed to raise $100m in an initial public offering on the Nasdaq Global Market, presenting an opportunity for internet and gaming group Tencent to exit.
Founded in 2016, Soulgate operates an online social media platform called Soul which is aimed at younger audiences who can peruse a variety of content based on their interests and communicate with each other. It does not require users to identify themselves but allows them to create new virtual identities.
People familiar with the matter told Bloomberg in March this year Soulgate could raise as much as $300m through an IPO. Morgan Stanley, Jefferies, BofA Securities and CICC have been appointed as underwriters for the offering.
The company boosted its revenue from $10.2m in 2019 to $76.3m in 2020, posting a net loss of $74.8m in 2020, down from $43m the year before.
Soulgate will use a portion of the IPO proceeds to fund research and development for its technology particularly in the areas of artificial intelligence, big data and technology infrastructure. It will also use the capital for marketing and promotional activities.
Tencent had provided $135m in series D2 funding for the company in May 2020, according to the IPO filing, GGV Capital having led a $60m series C round in December 2018. Soulgate had received tens of million dollars in series B funding from DST Global, Genesis Capital and 5Y Capital (then Morningside Venture Capital) in January the same year.
The company raised tens of millions of renminbi (RMB10m = $1.4m) in a series A round backed by 5Y Capital in 2017, having collected a seven-digit renminbi amount from investors including Jianming Asset Management the previous year.
Tencent’s Image Frame investment vehicle is the largest Soulgate shareholder, with a 49.9% stake, followed by founder and chief executive Lu Zhang (32%) and Genesis Capital (6%).
