China’s Popular English Learning Platform LAIX Listed on the NYSE

LAIX Inc., an English learning platform from China driven by artificial intelligence (AI) technology, listed on the New York Stock Exchange (NYSE) on Sept. 27. It is trading under the ticker symbol LAIX.

LAIX priced its initial public offering of 5.75 million American depositary shares (ADSs) at $12.50 per ADS for a total offering size of roughly $71.9 million. The opening price was $16, up 28 percent from the issue price.

In addition, the company has granted the underwriters an over-allotment option, exercisable within 30 days subsequent to the date of the final prospectus, to purchase up to an additional 862,500 ADSs at the initial public offering price per ADS.

Morgan Stanley & Co. LLC and Goldman Sachs (Asia) L.L.C are acting as joint bookrunners and representatives of the underwriters of this offering.

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LAIX was co-founded by Wang Yi, Hu Zheren, and Lin Hui in September 2012. The group of three used a self-developed AI system to provide users with a more personalized and efficient learning experience. At present, LAIX has released a few English learning applications, such as “English fluency”, “IELTS fluency”, as well as other language learning alternatives like “English for you”, “Fluent reading”, and “Authentic pronunciation class”.

According to the prospectus, LAIX will adopt a dual-class stock structure, where Class A and Class B common stocks differ only in conversion rights and voting rights. Class A common shares have one share of voting right and cannot be converted into B ordinary shares; Class B ordinary shares, on the other hand, have ten voting rights and can be converted into Class A ordinary shares.

The three co-founders will hold all of the company’s Class B common stocks after listing, accounting for 41.0 percent of the total outstanding share capital after the IPO.

As of June 30, LAIX has accumulated more than 83.8 million registered users worldwide, more than one million of which are paid accounts. In addition, LAIX said the platform’s monthly active visitors increased from 2 million in 2016 to 4.4 million in 2017, and rose to 7.2 million in the first half of 2018.

In an interview with local reporters at NYSE, Wang expressed his sincere gratitude to all users and staff, as well as to several companies and organizations, including IDG, GGV, and Xinyuan Capital, for their continued support.

LAIX said that the proceeds from the IPO will mainly be used for research and development, sales and marketing, as well as for general corporate purposes.