China’s top KOL agency Ruhnn to delist from Nasdaq amid tougher social media market at home

China’s first influencer company to go public plans to delist from Nasdaq with a privatisation offer by its co-founders, just 19 months after its initial public offering and amid fierce competition and tighter regulations in the domestic social media market.

Hangzhou-based Ruhnn Holding received a preliminary non-binding proposal from three company founders Min Feng, Lei Sun and Chao Shen, who offered to buy all outstanding shares at US$3.40 per American Depositary share (ADS), representing a 27.2 per cent premium to the company’s average 60-day price, the company said in a statement on Wednesday.

Ruhnn’s shares closed at US$2.89 on Wednesday, 59 per cent lower than at the start of the year, and less than one quarter of the US$12.50 per share when it listed in April last year.

As China’s top influencer agency, Ruhnn was the first of its kind to go public. The company signs and incubates key opinion leaders, and connects the KOLs with self-owned and third party online stores and merchants to promote their products via social media, including live-streaming.

Ruhnn has 180 KOLs in its portfolio and garnered its clients 295 million fans across social media platforms in the quarter ended September. Eight top-tier KOLs, those who generate more than 10 million yuan (US$1.5 million) in annual services revenue, brought in a total of 33.2 million yuan in the quarter, according to the company.

Zhang Dayi, Ruhnn’s chief marketing officer and owner of her own fashion business, is one of the company’s top influencers. She accounted for about half of the company’s total sales over a three-year period, according to its prospectus. Zhang has 12 million followers on Weibo, China’s Twitter-like social media platform.