Cloudary Corp., the online original literature business under Shanda Interactive, will possibly launch the long-planned IPO in next April, as reported by Sina Tech (source in Chinese). Merrill Lynch will still be one of the underwriters — it was removed from underwriter list sometime in last year. Shanda spokesperson declined to confirm it given the quiet period.
Earlier this month, Shanda appointed Robert Chiu, former managing director of Merrill Lynch, as president of Shanda Interactive and chairman of Cloudary. The appointment was seen as a help for Cloudary’s IPO. “We’ve been ready for IPO for a while, but we don’t have to when the stock market condition is discouraging”, Chiu said in a recent interview (article in Chinese).
Cloudary filed with SEC for IPO on the New York Stock Exchange to raise up to USD 200 million in mid-2011 and submitted a revised document earlier this year. In the meantime, its parent company delisted from NASDAQ.
As an online service for original literature, Cloudary makes revenues from e-book sales, print book sales, copyright licensing and online advertising. Contributors generate content directly on its platform and take revenue shares from online/mobile reading or print book sales. Readers pay 2-3 cent RMB for one thousand Chinese characters. This model was created by Qidian, a leading service in this market Shanda acquired in 2004, and widely adopted by most online publishing platforms.
According to the updated F-1, Cloudary’s six original literature sites totaled 1.6 million authors and 6 million titles as of March 31, 2012. The company claims it has 66.9 million monthly unique visitors in the first quarter of 2012, citing iResearch reports.
As China Mobile is still a giant on mobile reading, content providers, including Cloudary, are partnering with it to reach the largest possible audience. Cloudary claims 68 million unique mobile visitors through the China Mobile reading program, including 21 million paid users, and 1.6 billion average monthly mobile page views in 2011.
The company recorded $111.4mn in revenue, 63% from online businesses, and a net loss of $5.7mn in 2011. It saw over 100% growth in revenue for third consecutive year.
Cloudary was founded in 2008 with a series of acquisitions of Chinese leading online literature services. The introduction of Hou Xiaoqiang, former vice editor-in-chief at Sina, as CEO helped it grow to be the largest online literature publishing platform in China.