Chinese online literature platform Cloudary has withdrawn its two-year-old US IPO offering due to “market conditions”, Reuters reports. The move comes one week after the company raised $110 million in a deal that is said to have valued the company at 25 percent lower than a previous investment.
Cloudary filed for a listing in the US in May 2011, the deal was thought to be worth up to $200 million. The firm initially enlisted BofA Merrill Lynch and Goldman Sachs as underwriters before replacing them with Bank of America, Citic Securities and CICC HK Securities.
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A filing from the company reads as follows:
In light of current capital market conditions, the Company has elected not to proceed with the offering of securities contemplated in the Registration Statement at this time.
It may be u-turning on its plan to go public in the US, but there’s plenty of interest in Cloudary from an investment perspective. Its recent funding round saw Goldman Sachs and Singapore investment company Temasek Holdings nab undisclosed stakes. However, that deal is reported to have valued Cloudary at $600 million, which is some 25 percent lower than it was valued after equity firm Orbis paid $15 million for a 1.9 percent stake in May 2012.
Cloudary is a subsidiary of Shanda, one of China’s largest Internet companies and a powerhouse of online gaming. Founded in 2004, it powers six original literature websites using a community-driven approach.
Baidu, Tencent and Sina are the most notable among a number of China’s top Internet firms listed in the US. However, fewer firms have taken the US IPO route of late. Web retailer LightInTheBox bucked that trend to first Chinese tech company to list in the US this year with its $87 million IPO in June, two sizable firms may go public in the States later this year.
Baidu-owned travel site Qunar.com is tipped to list, while e-commerce giant Alibaba’s much-anticipated IPO could happen before the end of the year and is expected to raise up to $70 billion.
Alibaba CEO Jonathan Lu, who replaced founder Jack Ma at the helm this year, last week told the Wall Street Journal that the company is “ready” to list and “can do an IPO any time”. Though he did not provide concrete details, he called New York and Hong Kong “suitable” locations that the firm could pick.
Headline image via STAN HONDA/AFP/Getty Images