Chinese streaming giant, Tencent Music’s much talked about U.S. IPO is finally here, with the company announcing a $1.1 Billion raise in the same.
It is of course lower than the speculated $1.2 Billion, with the closed share price fixed at $13, lying in the lower bracket of the suggested $13-$15 range. Nevertheless, it continues to be one of the biggest tech IPOs this year. And despite an uncertain market and continuing trade tensions between the US and China, Tencent Music’s IPO acts as a positive beacon for newer tech companies looking at making it big.
According to the company’s regulatory filings, Tencent Music sold 41 million ADRs, while existing shareholders sold a further 40.9 million.
Tencent Music’s valuation with this IPO will soar to $21.3 Billion, once again proving market acceptance for floated valuations coming from most tech companies listing on US bourse. This valuation is a tad lower than Spotify’s $30 Billion from earlier this year. In terms of revenue, Spotify’s quarter revenues of $1.6 Billion are more than the $1.3 Billion reported by TME in its first six months.
However, what works in TME’s favour is its profitability, a rarity in startup ecosystems globally and something which continues to elude Spotify and presumably Apple Music. TME runs a gamut of services in China, which includes a plain-say streaming service as well as karaoke and live-streaming services. TME claims a consolidated 800 Million registered users, but that is by and large due to duplicate counts from multiple service.
TME’s IPO will end a rather interesting year for Chinese tech companies in the US market. Before Tencent Music’s debut, Chinese companies have together cobbled up close to $8 Billion in IPO listings, the highest amount since 2014, the year of Alibaba Group Holding Ltd’s record $25 billion IPO.
Firoz joins The Tech Portal to report on all stuff that relates to developers and their community. He is actively involved in multiple startups, helping them build and develop modern web products.