Tencent-Backed Social Networking App Soulgate Inc. Halts US IPO Process

Soulgate Inc., the operator of social networking app Soul, has decided to withdraw its F-1 registration declaration document and no longer issue securities, according to a document it filed on Thursday with the United States SEC.

Soul was established in 2016, with a product design based on interest mapping and gamification. It is positioned as a virtual social network for new generations of young people.

On May 10, 2021, Soulgate Inc. submitted its F-1 prospectus, and proposed to list on the NASDAQ with ticker symbol “SSR.” Morgan Stanley, Jefferies, BofA Securities and CICC served as underwriters. Then, on June 18, it submitted an updated IPO application document, setting its issue price range between $13 and $15 per American depositary share (ADS), planning to issue 13.2 million shares.

However, on June 23, shortly after updating the prospectus, Soulgate Inc. issued a statement announcing the suspension of its US public listing process. The statement also said that Tencent, a major shareholder, also supported the decision.

At that time, the company said it was happy to receive very hot market feedback after updating the price range. In this process, the company also received the possibility of other capital operations. After careful consideration, the management decided to suspend its IPO pricing process.

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According to a prospectus submitted previously, Tencent was Soulgate Inc.’s largest external shareholder before the IPO. Tencent holds 75,807,291 Class A ordinary shares in the company through Image Frame Investment (HK) Limited, accounting for 49.9% overall, along with 25.7% of voting rights.

In 2019 and 2020, the company’s revenue was 70.707 million yuan ($10.6 million) and 498 million yuan, respectively. Its net losses were 300 million yuan in 2019 and 488 million yuan in 2020.