Tencent-backed Zhihu’s Hong Kong IPO raises US$106 million for early investors

Quora-like website Zhihu prices its Hong Kong IPO at HK$32.06 per share, according to source

Deal will raise US$106 million for early backers including venture funds managed by Kai-fu Lee and Qiming Ventures

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Zhihu, China’s largest online question and answer forum, has successfully sold shares in Hong Kong. Photo: Costfoto/Barcroft Media via Getty Images

Published: 4:30pm, 14 Apr 2022

Zhihu, a Quora-like Chinese online content platform, priced its Hong Kong IPO at HK$32.06 per share, according to a source familiar with the transaction, raising about HK$833.6 million (US$106.3 million) for several early investors who are selling down their stakes through the deal.

The final offer price is 32 per cent lower than the initial HK$51.8 maximum price point marketed to investors. It also works out to a 4.9 per cent discount to its American depositary shares’ (ADS) closing price of US$2.15 in New York on Wednesday. Each Hong Kong share represents two ADS.

Tencent-backed Zhihu’s listing will allow early venture investors like Innovation Works Development Fund, which is co-managed by former Google China head Kai-fu Lee, Qiming Ventures and a unit of SAIF Partners, to cash out some of their holdings.

While the venture funds’ stake in the company will be reduced after the IPO, Tencent’s 12.8 per cent stake remains unchanged.

Zhihu had 99.6 million average mobile monthly active users and 500 million monthly viewers as of the fourth quarter of 2021. Photo: AP Photo

As all the 26 million shares on offer are being divested by existing shareholders, Zhihu’s Hong Kong IPO does not raise any new funds for the company. There is an overallotment option to sell up to 3.9 million more shares if there is a strong demand.