Beijing-based programmatic advertising company PapayaMobile has launched an IPO on China’s National Equities Exchange and Quotations Index (NEEQ: 837493). It is expecting to raise US$40 million through the issuing of common shares.
The public offering is another sign of NEEQ’s increasingly active role in the financing small to mid-sized companies — part of a broader push to pivot the Chinese economy away from state-bank lending and excess debt financing. At least 64.2 per cent of the companies on NEEQ are now startups.
One advantage of listing on NEEQ is it forgoes the open price-bidding process in other stock markets such as NASDAQ. Instead, traders at the NEEQ can privately negotiate prices with sellers, resulting in share prices being substantially different from the market price.
For PapayaMobile, going public will provide the ammunition it needs to accelerate iM&A plans. It aims to launch several multi-million dollar acquisitions in overseas markets including US, India and Southeast Asia in the coming years – this year alone, PapayaMobile expects to close two multi million acquisitions.
“We’ve identified robust growth opportunities in the international mobile marketing segment for the coming three years, offering unique market opportunities to pursue our ambitious global M&A plans,” said Si Shen, CEO of PapayaMobile in an official press statement. “With our organic growth and cross-border M&A expansions, we are confident in achieving 1 billion dollar market capitalisation within the next couple of years.”
Founded in 2008 by Si Chen, and Qian Wenjie, PapayaMobile began life as a mobile social gaming platform. It then diversified to focus on global programmatic advertising solutions with Papaya Ads (formerly Appflood). Notable clients include Alibaba, Baidu, VIP.com and Qihoo 360.
A spokesperson for PapayaMobile told e27 the ad business may account for a significant majority of the company’s revenue, but its self-published game business is still thriving and continues to grow.
In 2015, its ad business revenue accounted for 82.8 per cent of total earnings, or RMB 28 million (US$4.27 million); while its gaming revenue hauled in 17.2 per cent, or RMB 5.82 mllion (US$888,000).
By the end of 2016, PapayaMobile is projecting a revenue of RM 1 billion (US$153.3 billion).