Morning Report: A Tencent-backed Chinese ebook publisher just had a smashing first day as a public company.
While not counted in the pantheon of U.S.-listed technology IPOs that we pay the most attention to, today’s debut by China Literature is worth a moment of our time.
China Literature raised around $1 billion in its IPO according to TechCrunch. The company was, according to Crunchbase, “founded in March 2015 through a merger between Tencent Literature and the former Shanda Literature.”
TechCrunch also reported that the firm’s shares sold for HK$55 in the public offering, but closed their first day worth HK$102.5, a jump of nearly 83 percent.
According to Reuters, that gain is preceding China Literature’s first-day gains, 2017’s best initial IPO results were something of a tie:
Before China Literature, the biggest first-day pops of the year belonged to Snap Inc, the U.S. social media platform, and Shanghai-listed Caitong Securities. Each gained 44 percent on debut, according to Thomson Reuters data based on any company raising more than $500 million.
So, a new-ish company with the backing of one of China’s brightest Internet stars has a huge first day.
Why was the market so receptive to the offering? Perhaps because it is both profitable, and growing. Bloomberg reports that the firm recently staunched its losses:
China Literature had a profit of 213.5 million yuan ($32.2 million) in the first half of this year, compared with a 2.4 million yuan loss for the same period in 2016, a prospectus showed.
Perhaps that has something to do with it.
From the Crunchbase Daily:
VCs venture a bit further from home
- It’s common wisdom that investors prefer to back startups close to home. But does data support that assumption? A Crunchbase News analysis of geographic proximity between backers and portfolio companies finds that investors do prefer to invest locally, but over time they’ve been doing more deals outside their home states and metro areas.
Real estate startup Compass raises $100M
- Compass, a tech-enabled platform for buying, selling and renting property, raised $100 million in a Series E investment round backed by Fidelity Investments, IVP, Wellington Management, and others. The new financing reportedly values the 5-year-old company at $1.8 billion.
China Lit launches $1B IPO
- China Literature, an online publisher backed by Tencent, raised $1 billion in an IPO on the Hong Kong Stock Exchange. Shares surged more than 80 percent in early trading.
Intersection snags $150M for free Wi-Fi
- Intersection, a provider of Wi-Fi kiosks, has raised $150 million in a new funding round led by Graham Holdings Company. New York-based Intersection currently offers advertising-supported Wi-Fi, along with local news and information, in its home city, London, Philadelphia, and other urban areas.