Chinese Social Networking Service Momo Files for IPO

China's Momo Inc, a mobile-based social networking platform, filed with U.S. regulators on Friday to raise up to $300 million (roughly Rs. 1,800 crores) in an initial public offering of its American Depositary Shares (ADS).

The company said it was the No. 3 instant messaging app in China, and also offered mobile games, paid emoticons and mobile marketing services. Its user base more than doubled to 180.3 million in the year through September.

Social messaging services have drawn considerable investor interest of late. While Facebook paid $19 billion (roughly Rs. 1,16,600 crores) for Whatsapp, Viber was bought by online retailer Rakuten for $900 million (roughly Rs. 5,500 crores) earlier this year.

South Korea's Naver Corp said in July that its Japan-based messaging application subsidiary Line Corp had applied for an IPO at the Tokyo Stock Exchange, and was considering a dual listing in Japan and the United States.

The number of mobile Internet users in China are expected to rise by about 28 percent to 712.4 million between 2013 and 2017, according to market research firm eMarketer.

Momo, which earns 63 percent of its revenue from membership subscription fees, reported revenue of $13.9 million for the six months ended June 30. Net loss widened to $48.6 million (roughly Rs. 298 crores) from $8.4 million (roughly Rs. 51 crores) from a year earlier.

The company, which more-than-quadrupled its number of employees to 358 in the past two years, intends to use the proceeds from the IPO for research and development and other general corporate purposes.

Momo intends to list its ADSs on the New York Stock Exchange under the symbol "MOMO". It listed Morgan Stanley, Credit Suisse and J.P. Morgan Securities among underwriters to the IPO.

The filing did not reveal how many shares the company planned to sell or their expected price.

The amount of money a company says it plans to raise in its first IPO filings is used to calculate registration fees. The final size of the IPO could be different.

© Thomson Reuters 2014