PapayaMobile pursues global growth strategy after raising US$40m in IPO

Chinese online advertising service provider PapayaMobile is on track to close multiple acquisitions internationally with funds raised from its recent initial public offering.

With its trading debut Tuesday at the National Equity Exchange and Quotations(NEEQ) in Beijing, PapayaMobile is expecting to raise up to US$40 million of funding. NEEQ is a smaller stock exchange with simpler listing process compared with the two main Chinese exchanges in Shanghai and Shenzhen.

PapayaMobile is in discussion with a number of potential clients, as mainland companies seek out online agencies to help promote their brands internationally.

“[The IPO] will enable us to raise more funds to implement an aggressive international M&A [mergers and acquisitions] plan,” said Shen Si, co-founder and chief executive of the company. Shen said the company will acquire at least two local advertising technology companies in the US, Europe or India.

Research company eMarketer estimates mobile internet ad spending from mainland China will exceed US$22 billion this year, up more than 58 per cent than last year. The online advertising spending is expected to grow at 41 per cent and 29 per cent in 2017 and 2018 respectively.

The company’s growth is also fueled by Chinese mobile apps developers that are entering international markets, said Wen Chaohui, an analyst from GuangZheng Hang Seng Securities, a joint venture between Guangzhou Securities and Hang Seng Securities, a subsidiary of Hang Seng Bank.

“The domestic competition is too fierce and there is not much market space to expand at home. Meanwhile, emerging countries’ app industries are still underdeveloped,” he added.