China’s largest audio platform Ximalaya suspends IPO plans for a second time, indicating that investors remain cautious about Chinese internet companies as well as late-stage start-ups in general
China’s largest audio platform Ximalaya suspends IPO plans for a second time, indicating that investors remain cautious about Chinese internet companies as well as late-stage start-ups in general
Venture capital-backed Ximalaya (Shanghai Himalaya Technology Co., Ltd.), known for its highly interactive audio streaming platform, has quadrupled revenue in the past three years (Fig. 1). Yet, it failed to gain traction for its fundraising target near $100mn and suspended IPO plans for the second time last month in Hong Kong. Ximalaya’s position is representative of other late-stage tech companies in China.
The platform has an average of 80 million monthly active users as of December 2021, far surpassing local rivals Lizhi (59 million) and Qingting FM (24 million) according to Statista. As of 2021, Ximalaya employs over 3,000 professionals and serves over 600 million users worldwide.
It had previously withdrawn IPO plans in New York in Q3 2021, in which it was targeting $500mn. That came at a time when the US Securities and Exchange Commission had enforced more stringent rules for Chinese companies looking to list in the US.
Ximalaya’s decision to suspend IPO in Hong Kong last month indicates further cautious investor sentiment toward Chinese internet companies. This is given Chinese authorities’ additional scrutiny of foreign listings due to data security concerns. It also reflects a broader cooling of the late-stage fundraising market globally amid the selloff in the public tech stocks, which is also apparent in China (Fig. 2).
Founded in 2012, Ximalaya has had more than 10 funding rounds amounting to $1.4bn. Its joint sponsors are Chinese investment bank CICC, Morgan Stanley, and Goldman Sachs. It counts internet giants Tencent, Baidu, and Xiaomi, as well as Sony Music among its strategic investors.
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