Soulgate Postpones US IPO Plans After Receiving New Capital Opportunities

Chinese dating and social media company Soulgate Inc. has postponed its plans for an initial public offering in the US, after reportedly receiving offers for “alternative financing options”.

An official announcement was made on Wednesday to end the plans, which included Morgan Stanley, Jefferies, BofA Securities and CICC as the main underwriters. Paperwork was submitted to the SEC in May outlining intentions for a flotation on the Nasdaq exchange under the ticker ‘SSR’.

Soulgate was aiming to raise $100-200 million from its IPO, giving it an approximate valuation of $1.8 billion. Technology conglomerate Tencent is currently one of the company’s biggest backers, holding a not quite majority 49.9% stake.

One of its flagship products is a dating and social app called Soul. Users create avatars, explore the virtual universe, and connect with each other through games and other virtual experiences.

The platform had over nine million daily active users in March, but has consistently faced net losses over the past couple of years.

Despite continued political tensions between the two countries, a record 29 IPOs for Chinese companies have been completed on US markets during the first six months of 2021.

Ivy Wong, chair of law firm Baker McKenzie’s Asia Pacific capital markets practice, told Reuters: “The Chinese equity story is still appealing to international investors, whereas the U.S. valuation and international fundraising opportunities are just as appealing to the Chinese issuers.”

However, President Biden has issued threats to kick them out if they don’t meet the necessary auditing standards.

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