The underwriters for the offering were Morgan Stanley, Credit Suisse, J.P. Morgan and China Renaissance.
Momo is a mobile-based social networking platform. It enables users to establish and expand social relationships based on location and interests. The platform includes the Momo mobile application and a variety of related features, functionalities, tools and services. Momo is considered one of China’s leading mobile social networking platforms after less than three years, since its inception in 2011.
For the quarter ending in September, Momo ranked third in terms of average monthly active users (MAUs) and second in daily active users (DAUs) among the mobile social instant messaging apps in China.
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The company has roughly 180.3 million registered users, an increase of 160.8% from the previous year. Of these registered users, 60.2 million are MAUs, which grew 112.8% from September of the previous year. The 25.5 million DAUs increased 140.6% from the previous year. There were 2.3 million members at the end of September 2014, representing an increase of 659.9% from the previous year.
Users sent a daily average of 655.2 million one-to-one messages, representing a daily average of 26 one-to-one messages per DAU, in September 2014. Of these messages, 63.5% were exchanged among people who had already followed each other.
Momo began to generate revenues in July 2013 from its membership subscription package, which provides members with additional functions and privileges. The company generated 63.0% of its net revenues from membership subscription fees in the first half of 2014. Revenue streams also came from mobile games, paid emoticons and mobile marketing services in the second half of 2013.
Revenues more than quadrupled to $13.9 million in the first half of 2014 from $3.1 million in the second half of 2013. Momo had net losses of $3.8 million in 2012, $9.3 million in 2013 and $8.3 million in the first half of 2014.
It is worth noting that Alibaba Group Holding Ltd. (NYSE: BABA) invested in Momo in 2012, taking a 20% stake in the company for $100 million, according to Brean Capital. According to the filing, Momo and Alibaba are planning a partnership with targeted ads for merchants on Alibaba. Momo plans a private placement with Alibaba of $50 million and $10 million to 58.com Inc.
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