Bilibili to IPO in US for $400M, 83 Percent of Revenue From Games
On March 2, Bilibili submitted an IPO application (FORM F-1) to the U.S. Securities and Exchange Commission (SEC). Bilibili plans to list in the U.S. under the symbol “BILI” and aims to raise $400 million. Its underwriters are Morgan Stanley, Bank of America Merrill Lynch and JPMorgan Chase. The price per share and number of shares issued are not disclosed in the prospectus.
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The prospectus showed that, as of Q4 2017, the number of active monthly subscribers was 71.8 million, two and a half times that in Q1 2016. The daily average online time was 76.3 minutes. 81.7 percent of Bilibili users were young people born from 1990 to 2009. In addition, the membership retention rate of has exceeded 79 percent for 12 consecutive months .
Bilibili started from ACG- (Anime, Comic and Games) related content and has developed into a comprehensive content platform integrating video, gaming, live broadcast, and community services. 85.5 percent of video traffic are of Professional User Authoring Videos (PUGV). The number of active content creators in 2017 grew by 104 percent from 2016.
As of December 31, 2017, a total of 31.6 million users had passed the “Bilibili Original Community Entrance Exam” to become an official member. Long watching periods and high retention rates are two core indicators for Bilibili‘s “stickiness”.
The prospectus showed that Bilibili‘s total revenue in 2017 was $389 million (2.468 billion yuan), and the annual non-GAAP net loss was $15.9 million (101 million yuan). The 2017 and 2016 annual revenue growth rates were 372 percent and 299 percent, respectively.
Game content brought more income to Bilibili than any other category. Game content accounted for 83.4 percent of total revenue in 2017. Live broadcast business and advertising business started later, accounting for 7.1 percent and 6.5 percent, respectively. In 2017, the top three operating costs were the revenue sharing cost of $146 million (926 million yuan; accounting for 48.3 percent of total costs), bandwidth server cost of $74 million (469 million yuan; accounting for 24.4 percent of total costs), and content and copyright costs of $41 million (262 million yuan; accounting for 13.6 percent of total costs).
Chairman and CEO Chen Lui is the largest shareholder, accounting for 21.5 percent of all shares. Founder and President Xu Yi holds 13.1 percent of shares. Vice Chairman and COO Li Ni holds 3.7 percent of shares. Among the major institutional investors, CMC holds 12.8 percent of shares, more than any other institution. Loyal Valley Capital (9 percent), IDG-Accel (7.6 percent), Legend Capital (5.9 percent), and Tencent (5.2 percent) rank the second largest to the fifth largest institutional shareholders, respectively. Calculated by data released in the prospectus, the Bilibili management team has over 80 percent of voting rights even after many rounds of funding. Decision making power within Bilibili is controlled by its management team, which is rare in the Chinese video industry.
The prospectus also disclosed that, as a highly popular content community of young people in China, Bilibili has a mission to enrich Chinese culture for young generations. The funds will be used to create high-quality content and improve user experience. At the same time, Bilibili will further strengthen its technology platforms, including cloud technology, big data and artificial intelligence, and enhance its competitiveness in all aspects.