Chinese Social-App Group Momo Expects to Raise $256.6 Million in IPO

By Maria Armental 

The Chinese maker of social-media dating and chat mobile apps, Momo Inc., expects to raise $256.6 million from a planned stock offering, the company said in a regulatory filing.

That figure includes shares to be sold publicly and privately and assumes shares will sell at the mid-range of its planned offering range of $12.50-$14.50 per American Depositary Share. Additional shares the underwriters may choose to sell aren't included.

Momo's offering is seen as a test for investors' appetite for Chinese IPOs beyond Alibaba Group Holding Ltd., China's largest e-commerce company that debuted in September, with shares closing on the first day at $93.89, well above the $68 initial price.

Alibaba is a 21% shareholder in Momo, whose board includes one current and one former Alibaba executive. Momo also works with Alibaba on e-commerce offerings.

Momo, which will adopt a dual-class, ordinary-share structure, is to trade on the Nasdaq exchange under the symbol "MOMO."

Its co-founder, chairman and chief executive officer will own all Class B shares, retaining 78% of the aggregate voting power, according to the filing.

Yan Tang

Underwriters are Morgan Stanley, Credit Suisse, J.P. Morgan and China Renaissance.

Under the terms of the private portion of offering, Alibaba Investment Ltd. and 58.com Inc. would buy from Momo $50 million and $10 million of Class A shares, respectively.

Launched in 2011, Momo reported 180.3 million registered users, 60.2 million monthly active users, and 25.5 million average daily active users for the first nine months of the year, more than double from the year-ago period.

The company said 68.1%, or $17.9 million, of its $26.2 million of nine-month revenue came from membership subscription fees.

The company has yet to post a profit. It reported an accumulated deficit of $97.3 million through Sept. 30, according to the filing.

Write to Maria Armental at [e-mail]

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