Chinese Tech News Site 36Kr Sets Terms For $63m US IPO

36Kr Holdings Inc, an Ant Financial-backed Chinese tech news portal, has set the terms for its initial public offering (IPO) on the US stock market, with plans to raise $63 million at the upper end of the expected range.

According to its filing with the US Securities and Exchange Commission, the Beijing-based company seeks to sell 3.6 million American depositary shares (ADSs) priced at between $14.50 and $17.50 each. Each ADS represents 25 ordinary shares.

If the underwriters will exercise the over-allotment option, 36Kr expects to raise up to $72.45 million. The floatation, however, is lower than the company’s earlier target of $100 million. It plans to trade on Nasdaq Global Select Market under the symbol “KRKR”.

Founded in 2010 in Beijing, 36Kr has reached more than 150 million readers worldwide and published over 100,000 articles, helping Chinese startups to raise their profiles overseas and ushering global corporations into Asia.

In May, Japanese media group Nikkei Inc announced its partnership with the Chinese tech news portal, founded in 2011 by Chengcheng Liu, to boost coverage in China and across Asia. Nikkei has also acquired a majority stake in DealStreetAsia.

Based on its filings, 36Kr posted revenue of $6.3 million in the second quarter of this year, up by 28 per cent from a year earlier. Its losses, however, have more than doubled to $4.6 million from $2 million in the same period a year ago.

In 2018, it had revenue of $43.6 million, up 148 per cent from 2017 while net income for the year reached $5.9 million, up 411 per cent year-over-year.

36Kr said it will use the IPO proceeds to enhance its content offerings, expand its business service scope, improve data analytics capabilities, and supplement working capital, among others.

Based on publicly available data, 36Kr has raised a total of $107.8 million in funding over five rounds, including the $91.8 million it raised in its venture round in 2013 and another $14.4 million in 2016. Ant Financial anchored 36Kr’s Series D round, which raised an undisclosed amount of funding, in 2015.

The company said it is dedicated to serving new economy participants in China. New economy-focused business services include online advertising, enterprise value-add, and subscription services.

According to a report released by China Investment Corporation, the size of New Economy-focused business services market in China, primarily consisting of these three segments, increased significantly from $7 billion in 2014 to $20.2 billion in 2018 with a CAGR of approximately 30.3 per cent.

The market is expected to further grow at a CAGR of approximately 22.5 per cent from 2018 to reach $55.6 billion by 2023, according to the report.