Chinese Education Service Provider Logicreation Eyes $152m In ChiNext IPO

Knowledge and information sharing service provider Beijing Logicreation Information & Technology Co., Ltd, also known as Beijing Siwei Zaowu Information Technology, has filed for an initial public offering (IPO) on the ChiNext board of the Shenzhen Stock Exchange, according to a company filing on September 25.

Logicreation is looking to raise 1.04 billion yuan ($152 million) from the IPO, by offering up to 10 million shares, which will bring its valuation to 4 billion yuan ($586 million).

Beijing-based global investment bank China International Capital Corporation Limited (CICC) is the principal underwriter for the deal. After the IPO, Logicreation will allocate the proceeds to spruce up its technology and service platforms, educational centres, and also facilitate an intelligent research centre.

Logicreation, the parent company of the popular Chinese talk show Luogic, was co-founded by Zhenyu Luo in Beijing in 2014. It devotes itself to offering new generation, life-long learning services driven by internet technology. The company utilises short- and long-format videos, live streaming activities, audio showcases, and other tools to create interactive courses and products. 

Since its inception, Logicreation has launched two flagship internet platforms — Dedao APP, and Luoji Siwei WeChat account.

As of March 2020, Dedao’s registered users stood at 21.35 million, with monthly active users amounting to 3.5 million, according to its prospectus. Additionally, it has managed Dedao University through the integration of online and offline learning. 

Logicreation clocked a net profit of 61.31 million yuan ($9 million) in 2017, 47.64 million yuan ($7 million) in 2018, and 115 million yuan ($17 million) in 2019. Besides, its sales earnings in the first quarter of this year stood at 192 million yuan ($22 million), it said. 

Luo will remain the largest shareholder in Logicreation holding around 22.8 per cent stake. The major shareholders include China Culture Industrial Investment Fund (5.6%),  Sequoia Capital China (4.4%), ZhenFund (1.4%), and Loyal Valley Capital’s Shanghai Lejin Investment (4.2%). 

Sequoia Capital China, Tencent Investment, Huagai Capital, and others together invested in its Series D round in 2017. Previously in 2015, China Culture Industrial Investment Fund had teamed up with Qiming Venture Partners, ZhenFund, Loyal Valley Capital and Heyi Group pumped 100 million yuan ($14 million) into it.