Chinese Social Network Soul Files For US IPO

Shanghai Renyimen Technology, parent of social media app Soul, has filed confidentially for an initial public offering (IPO) in the U.S., which could take place as soon as this year, according to Bloomberg.

The parent company is set to raise around $300 million from the listing, although the deliberations are still in talks and may not go forward. The company’s valuation is already at over $1 billion before the IPO, Bloomberg reported, citing unnamed sources. The app company is working with advisers including China International Capital Corp.

Soul, which was formed in 2016, works by letting like-minded users find one another through recommendations bolstered by artificial intelligence (AI), according to Bloomberg. They take a quiz which puts them in one of five categories. Then, they can have voice or text chats or group chats and post in a public forum. The app has over 100 million users in China and over 30 million active users per month.

The app is also available in South Korea, Japan and North America, and its backers include GGV Capital and 5Y Capital, Bloomberg reported.

China-based companies have been doing well in terms of IPOs, with 30 of them in the pipeline raising $11.7 billion, PYMNTS reported. The IPO rate is the highest for Chinese companies since the debut of Alibaba in 2014, at which time there were 14 companies including Alibaba that raised $25.7 billion.

Among 2020’s class were tech company Lufax and online real estate platform Ke Holdings. Those offerings were ranked in the top U.S. listings.

Not everything went swimmingly though. PYMNTS reported that numerous firms had to put their plans on the back burner amid the pandemic, while others were dealing with internal problems. Luckin Coffee was one of the latter, facing its delisting over an independent scandal.

But social media apps have had it hard in China before, with Soul facing trouble as it was suspended, along with other apps, by the Cyberspace Administration of China, blamed for distributing pornographic content, Bloomberg reported.