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Alibaba's Social Partner Plans $200m IPO

Momo Inc, a mobile-based social networking platform expects to raise $256.6M in an IPO.

The $256.6M figure includes shares that will be sold both publicly and privately; the company assumes the shares will sell at the mid-range of its planned offering range of $12.50 to $14.50 per American Depository Share (ADS). Any additional shares the underwriters choose to sell are not included in this figure.

Momo’s IPO is viewed as a trial for investors beyond Alibaba Group Holding Ltd., with shares closing on the first day at $93.89, which exceeded the initial price of $68.

Alibaba has a 21% stake in Momo and includes one current and a former Alibaba executive on the board. Momo also collaborates with Alibaba on e-commerce offerings.

The company plans to implement and embrace a dual-class and ordinary-share structure and intends to trade under the “MOMO” symbol on the Nasdaq exchange.

Yan Tang, Momo’s co-founder, chairman and CEO will own all Class B shares which will allow him to retain 78% of the aggregate voting power.

Morgan Stanley, J.P. Morgan, Credit Suisse and China Renaissance are the company’s underwriters, and under the terms of the private portion of offer, Alibaba Investment Ltd. And 58.com Inc. would purchase from Momo $50 million and $10 million of Class A shares.

The company started back in 2011 and has reported over 180.3M registered users, 60.2M monthly active users and 25.5M average daily active users for the first nine months of the year. Since then Momo has more than doubled from the year-ago period.

Momo indicates that 68.1% ($17.9M) of its $26.2M of nine-month revenue generated from its membership subscription dues. Currently Momo has yet to report a profit but according to the filing, the company accumulated deficit of $97.3M through Sept. 30th.

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