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Chinese search engine Sogou chases $540M in US IPO
Search engine provider Sogou Inc. will be the latest Chinese tech firm to go public in the United States, as the company filed paperwork Friday to raise $540 million on the New York Stock Exchange.
Sogou is being spun off as a standalone company from Sohu.com Inc., the Chinese internet portal that itself floated on the Nasdaq exchange back in 2000. The company will offer 45 million shares for between $11 and $13 apiece, giving the company a market value of $4.8 billion at the midpoint range, according to Nasdaq.com.
Founded as a Sohu.com division in 20o4, Sogou offers a variety of products in addition to its core search engine offering. That includes web application products covering verticals such as music, pictures, video clips, news and mapping, its own browser based on Google Chrome’s WebKit code base and an input method editor that makes it easy for users to type using Chinese characters.
The company has a close relationship with Chinese tech giant Tencent Holdings Ltd. It’s the largest shareholder in the company, with a 44 percent stake prior to the float. In turn, Sogou is the default search engine provider for Tencent’s Mobile QQ browser and qq.com. Sogou had net income of $56 million on revenue of $660 million in 2016 and had booked $711 million in sales for the 12 months to June 30 this year.
Sogou’s announcement that it would be going public adds to a buoyant market for tech IPOs that has seen successful floats for companies including MongoDB Inc. and ForeScout Technologies Inc. over the last two weeks. Sogou is not alone among Asian firms that have raised capital via public offerings in the U.S. recently either. Chinese financial technology firm Qudian Inc. surged 48 percent in its first day of trading on Oct. 18, while Singapore-based gaming and e-commerce startup Sea Ltd. raised $884 million on the NYSE Oct. 20.
China’s largest online publishing and e-book company China Literature Ltd., another company that lists Tencent as its main investor, also announced plans to go public Oct 23. with a $1.1 billion IPO on the Hong Kong Stock Exchange.
Image: Sogou
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