Momo, a leading Chinese social network, live video site and dating platform, has announced that it has reached a definitive agreement to acquire 100% of social and dating app TanTan.
In a press release, Momo states: “Momo agreed to acquire 100% fully diluted equity stake in Tantan for a combination of share consideration and cash, including approximately 5.3 million newly issued Class A ordinary shares of the Company and US$600.9 million in cash.”
The total value of the deal is reported to be approximately $735 million.
TanTan is able to boast over 5 billion matches and counting, and is one of the most popular apps among young Chinese singles.
Mr. Yan Tang, Chairman and CEO of Momo said, “Our core position will continue to center on social networking and this acquisition enriches our product line in the social space.
“We will continue to invest and incubate more sub-brands to serve the social and entertainment needs of different demographics.
“Tantan has become widely recognized within a short period of three years since its inception, which is largely attributable to the outstanding performance of its talented team.
“We also respect Tantan’s product strategy that focuses on the customer experience of female users. After the acquisition, the Tantan team will continue to operate the mobile apps under the Tantan brand with our full support.”
Mr. Yu Wang, Chairman and CEO of Tantan, added, “Momo and Tantan have their own strengths in their respective markets and among targeted customers.
“The acquisition is a critical strategic upgrade to cover a greater range of user demographics and needs, and build up a larger social networking market through complementary businesses and strategic synergy.
“We are very confident in our future development.”
Part of the growth of Momo has been attributed to a worsening gender ratio among young Chinese, with the demographic impacts of the one child policy causing significant imbalances.
Loneliness is fast becoming a major problem in China, and the industry surrounding this (virtual companions and solo karaoke booths) is set to outpace the Japanese market.
In June, Tantan raised $70 million series D funding in a round led by Chinese online entertainment firm YY Inc.
In 2016, the company completed a $32 million series C round of financing led by DST Global, Vision Plus Capital and LB Investment.
Momo had 94.4 million active users last September. Tantan had a total 90 million registered users and six million active users last June.
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