Tencent-backed social networking app Soulgate officially withdraws its U.S. IPO

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Soul avatar-based socialization and virtual world planets give the company the potential for these more immersive experiences.

Chinese virtual social networking app Soul announced on June 10 that it had decided to withdraw its F-1 registration statement document and would no longer issue titles under the requirement.

Soul is a networking app operating a digital socializing space for Chinese Gen Z. On June 18, 2021, it closed a $167 million equity investment round led by Tencent and miHoYo, a mobile game developer. Before that, the company had secured four venture capital financings.

Previously, on May 10, 2021, Soul filed a prospectus to list on Nasdaq under the symbol “SSR”. Morgan Stanley, Jefferies, BofA Securities and CICC were to be joint bookrunners in the deal.

On June 18, 2021, it filed an updated prospectus to issue 13.2 million ADS at a price range of $13 to $15.

While later on June 23, Soul’s listing was canceled with management claiming to have “alternative financing options”, as well as backing from its major shareholder Tencent.

Founded in 2016, the Shanghai-based company posted revenue of $102 million for the 12 months ended March 31, 2021, with an average daily active user (DAU) of 9.1 million, an increase 94% compared to the period of the previous year. According to the previously submitted prospectus, prior to the IPO, Tencent is Soul’s largest external shareholder. Tencent owns 75,807,291 Class A ordinary shares of Soul through Image Frame Investment (HK) Limited, representing 49.9% of the shares and 25.7% of the voting rights.

Domestic competitors include Jimu (Chinese: 积木), MOMO (MOMO: NASDAQ), and TanTan.

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