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China’s Not Quite Craigslist IPO
This is the first Chinese tech original community offering in the U.S. since Alibaba’s runaway success stock sale in September. Jack Ma’s company owns a 20% stake and plan to buy additional shares as division of the IPO. 58.com (WUBA), a company often referred to as China’s Craigslist, is also purchasing a stake. Momo raised $216 million from the bring in sale and is now worth more than $3 billion.
This is the first Chinese tech original community offering in the U.S. since Alibaba's runaway success stock sale in September. Jack Ma's company owns a 20% stake and plan to buy additional shares as division of the IPO. 58.com (WUBA), a company often referred to as China's Craigslist, is also purchasing a stake. Momo raised $216 million from the bring in sale and is now worth more than $3 billion.
Momo said that it has only 60.2 million monthly vigorous users and 25.5 million standard daily users. And the company is still not money-making. Jonathan Xiaosong Zhang, chief monetary officer of Momo, said this is intentional. He said the company's main concern right now is boosting its user base.
Chinese online gaming company Netease (NTES) issued a declaration Wednesday accusing Momo chairman and CEO Yan Tang, who had worked for Netease prior to starting Momo, of immoral behavior.
Momo responded to Netease in a Securities and Exchange Commission filing afterward Wednesday. The company quoted Tang as saying that the “allegations are malevolent and intends to vigorously defend him against them.”
There have also been manifold reports in Chinese media outlets about how Momo is being used by prostitutes to find clients.
My colleague Sophia Yan in Hong Kong lately downloaded Momo and told me that “it actually is like Tinder in that its location based tracking.” She added that you can in fact blacklist people you no longer desire to meet and that it was “very sex-focused.”
“Tinder is purely a dating app. We give confidence people to get bigger their social circle and safeguard their affairs,” he said.
Either way, investors didn't seem too concerned Thursday. With the backing of Alibaba's Jack Ma, it shouldn't be a huge surprise.
But Momo needs to locate a way to boost its income and in fact earn a revenue one day if it wants to live up to its name and become a true impetus (or momo) darling on Wall Street.
