NetEase Youdao Raises More Than $200 Million in NYSE Listing

Youdao Listed on New York Stock Exchange late on October 25
Youdao Listed on New York Stock Exchange late on October 25 (Source: Youdao)

Youdao, the online education subsidiary of Chinese tech giant NetEase, made its debut on the New York Stock Exchange late on October 25. Listed under DAO, the company priced its initial public offering at $17 per share and stated it seeks to raise $220 million in total.

Youdao CEO Zhou Feng treated the company’s IPO as the start of a new semester, saying, “Today is just a new semester opening ceremony. There are still many unknowns that we need to explore and venture into. Thanks to the continuous efforts put forth by everyone, Youdao will surely grow into a company that can contribute more to the society.”

Youdao began as an online dictionary and translation services provider. Since 2014, it has provided users with a comprehensive set of reliable learning products and services such as online dictionaries, courses and other extra curricular learning solutions.

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According to the company’s prospectus, as of the first half of 2019, Youdao’s learning apps have amassed average monthly active users (MAU) totaling over 100 million, making it the leading education app in China.

In the first half of 2019, the company had a revenue of 548 million yuan, a year-on-year increase of 67.67%. Among them, online learning, smart devices and membership subscriptions accounted for 314 million yuan, an increase of 58.12%.

In addition, throughout the first half of 2019, the company had 338,000 paid users using its higher education courses, 105,000 of which were users subscribed to its K12 courses, marking 80.8% year-on-year increase.

Concurrently with the IPO, Youdao plans to make a private share placement. NetEase’s biggest institutional investor, Orbis Investment Management, committed to subscribe for $125 million of Youdao’s common shares.

NetEase currently owns a 66.2% stake in Youdao. After the IPO, NetEase will remain the controlling shareholder, according to the prospectus.