The owner of Blued, the largest LGBTQ dating platform in China, rallied 46 percent during its trading debut on the Nasdaq Global Market after securing $85 million in its IPO.
Shares of BlueCity (BLCT) Holdings Ltd., which had risen as much as 125 percent earlier Wednesday, closed its New York session at $23.43. The Beijing-headquartered group had sold 5.3 million shares at $16 apiece in its initial offering. The company's market cap has already surpassed $880 million.
U.S. regulators have of late put heavy pressure and scrutiny on Chinese IPOs as frictions rise over trade, their handling of the ongoing global health crisis and Beijing's moves to broaden its influence on Hong Kong.
Chinese firms like 58.com Inc. and Sina Corporation received propositions to be taken private in the past few weeks. Others including Alibaba Group Holding have already finalized second listings in the financial center.
BlueCity stated that proceeds from its initial offering will fund its business operations and expansion, big data and artificial intelligence studies, acquisition and other investments.
Fundamental to the group's business is the Blued mobile app, China's biggest gay dating app in terms of monthly active users last year. As of March 31, 2020, BlueCity had more than 49 million registered users on Blued, with 6 million monthly active users in the first quarter, up from 5 million in the previous year period.
Blued serves over 210 countries and regions, and it also claims to be the biggest gay dating app in South Korea, India, Vietnam and Thailand.
BlueCity publicly filed its initial bid prospectus just three weeks earlier and, already, despite the ongoing China-U.S. frictions, the group was ushered to go public by apparent investor interest in a geographical location that's willing to support minority groups. BlueCity had earlier placed $50 million as placeholder IPO target.
Established in 2011 by former policeman Baoli Ma, BlueCity integrated CDH Investments, Shunwei Capital and Shanghai Zhonglu Group as its major investors. The company is the first of its kind in the world built on the LGBTQ community that has listed on the stock market.
Besides providing dating services to its 49 million fan base, BlueCity's platform also offers livestreaming service, which has turned out to be its main source of revenue. BlueCity's total sales rose 52 percent last year, to 759 million yuan ($108 million).
BlueCity's IPO is backed by the booming "pink economy" as the backdrop. Based on data by consulting agency Frost & Sullivan, the global LGBTQ market is expected to reach $5.4 trillion by 2023.
