NetEase subsidiary Youdao has reportedly filed for an initial public offering (IPO) with the US Securities and Exchange Commission on Monday this week. The search engine and big data company is the latest Chinese firm to list in the US despite the ongoing tensions between both nations.
According to the company's latest prospectus, it will be listed on the New York Stock Exchange under the ticker symbol DAO. The company plans to raise up to $300 million through the IPO. The company's IPO pricing terms and the number of shares it plans to list has yet to be disclosed. Bookrunners for the company's IPO include international banks such as Morgan Stanley, CICC, HSBC Corporation, and Citi.
Youdao had stated in its prospectus that the IPO is the company's way of exploring more market opportunities aboard given the increased interest in intelligent learning. The company is banking on the fact that more investors are now aware of the online learning trend, which is being driven by the rise of artificial intelligence, data analytics, and ultra-fast mobile networks.
As of last year, the intelligent learning industry was estimated to have reached around $14.46 billion in size. Analysts expect the industry to grow even larger in the coming years, reaching a size of around $100 billion by 2023.
The NetEase subsidiary, which was originally founded in 2006, mainly operates applications and online platforms using big data technology. This includes a search engine on its parent company's web portal in China called 163.com. The search engine lets users search for websites, news, music, blogs, and Chinese-to-English dictionary entries.
Apart from the search engine, Youdao also develops a number of mobile applications utilizing its access to big data. This includes its Youdao Dictionary, its Hui Hui Assistant, and Youdao Cloud Notes. Youdao Dictionary, which was launched in 2007, is the company's flagship application and is considered to be the No. 1 language app in the country with more than 51.2 monthly active users.
The company is also busy developing other online products based on its language translation application services. This includes digital learning products, interactive learning apps, and various other apps for the study of academic subjects like math and English.
Youdao had stated that it already has around 100 million average total monthly active users across its various applications as of the first half of this year. According to its latest earnings report, the company had a net revenue increase of 67.7 percent for the first half of the year to $79.9 million.
