Two big fund-raising stories are in the headlines as people return to work after the Dragon Boat holiday, including a new IPO filing by online recruitment site Zhaopin.com and a big new funding round by a year-old mobile news app developer. The first news bit has seen Zhaopin announce a price range for its IPO nearly a month after making its first public filing for the offer. Meanwhile, the app whose name translates roughly to Today's Top News, is showing big promise in the mobile news space, with word that its developer has just raised an impressive $100 million in new funding.
Let's start with the Zhaopin news, which has broader significance as it's the latest indicator of investor sentiment towards Chinese tech firms in the New York IPO market. That market was flying high in the second half of last year, but was showing increasing signs of slowing in April after Chinese firms raised several billion dollars in new funds. But then the market appeared to be getting a second wind with the relatively strong offering of e-commerce giant JD.com (Nasdaq: JD) 2 weeks ago.
Now Zhaopin has made a new filing for its IPO, following an initial one in early May, setting a price range of $12.50 to $14.50 per American Depositary Share (ADS). But the most interesting part of the filing is the fund raising target, which could reach up to $95 million if the offer prices at the top of its range. That figure is quite significant, since it's largely unchanged from the $100 million fund raising target contained in the earliest reports when Zhaopin made its first filing. (previous post)
Normally no change isn't a cause for big celebration, as it means that things are moving along according to plan. But in the current market where many recent companies have had to significantly downsize their fund-raising targets, this re-affirmation of Zhaopin's plans looks like a positive sign.
I said after the JD debut late last month that the market could be getting a second wind, and this latest filing would appear to support that view. But I still do think the this second wind will be short lived, and the New York IPO market for Chinese tech firms will quickly evaporate shortly after e-commerce leader Alibaba's highly anticipated offering that is likely to drain billions of investor dollars around late June.
From Zhaopin let's move to the venture capital realm, where the developer of the Chinese Top News mobile app has just reportedly won the massive $100 million in new funds. The award was announced by the app developer itself, a company called Beijing Zijie Tiaodong, whose name translates to Beijing Byte Beat Technology.
Beijing Zijie launched the app in August 2012, and has already received tens of millions of dollars in venture capital funding during its short lifetime. The app looks quite interesting, as it scours the Internet for news, photos and other items of the day that might be of interest to readers based on their individual interests. Then it compiles them into a short format that is easily digestible for readers.
I personally use a similar news app from Google (GOOG, GOOGL), called Google News, and think this kind of app will become the primary way for consumers to get their news and other latest information in the future. Of course good execution and early arrival to the sector will be key elements to success, as well as constant innovation in an area that's likely to become very competitive very quickly. But at least for now, the investment community certainly seems to believe that Top News' developer could have many of the elements needed to succeed in this space.
Bottom line: Zhaopin's latest fund-raising target shows the New York IPO market could be getting a second wind, while a major new fund-raising for the Top News mobile app could show the company has big potential.