BlueCity Holdings (Nasdaq: BLCT), the operator of Chinese gay dating platform Blued and LGBTQ online community, has gotten off to a good start on Wednesday as the company carried out its public trading on Nasdaq Global Market. Shares of the Beijing-based company soared 124% on its first day of trading, closing 46.4% up at $23.43 per share compared with the issue price at $16.
As the world’s first gay social platform to be publicly-traded, BlueCity has raised $84.8 million total gross proceeds in its U.S. initial public offering. The company said the IPO capital will fund its geographic expansion and investment in artificial intelligent and big data, according to its prospectus.
Started as an underground LGBTQ online forum Danlan.org by the 23-year-old closeted police officer Baoli Ma in 2000, BlueCity is China’s largest LGBTQ platform with its gay dating app Blued attracting 49 million registered users in close to 210 countries and regions. Overseas users represented over 49% of the company’s total monthly active users (MAUs) as of March 2020.
The company said they have devoted, and will need to devote substantial managerial, financial and human resources to develop overseas markets with different user needs, competitive landscapes and operational requirements. As the company is hardly generating revenue from users outside the country of its origin, the co-founder and CEO Baoli Ma is optimistic about overseas expansion.
“We have seen an increase of revenue contributed by users outside China in recent years,” Ma said in a press conference before the listing ceremony on Wednesday evening. “Our ways of expansion could make us competitive when going global, so I am confident about our overseas expansion.”
Already, the Blued app has the largest LGBTQ communities in Asian markets such as China, India, South Korea, Thailand and Vietnam in terms of average MAUs in 2019, according to a Frost & Sullivan Report. India has blocked dozens of Chinese apps last Monday, citing concerns of national security and the privacy of citizens’ data. Blued, as of now, was not among them.
Meanwhile, in the United States, Blued’s foreign competitor Grindr who was previously owned by a Chinese gaming company Beijing Kunlun Tech Co. Ltd., was accused of leaking personal data. Kunlun was then asked by the U.S. government to transfer its ownership to a local business in June.
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According to the prospectus, BlueCity generated a total revenue of 758.9 million yuan ($107.2 million) in 2019, a 51.4% increase from a year ago, in which its live-streaming services earned the company 671.4 million yuan ($94.8 million) which made up 88.5% of its total revenue. These functions enable users to build social connections with other members of the LGBTQ community who share similar interests and backgrounds.
“We are not a live-streaming company, but we found that it could boost interactions between users,” Ma said when asked if the company would turn its focus to live-streaming services. “We expect revenue from live streaming services will gradually decline in the future.”
Currently, Blued is primarily targeting gay men, but the company has planned to reach a broader range of sub-groups of the LGBTQ community and entered into a “a letter of intent in June 2020 for a potential equity investment to acquire a leading location-based social networking mobile app targeting the lesbian community.”
“We will not only focus on the gay demographic,” Ma said. “By providing ‘full life cycle services’ to the LGBTQ community, we hope our services can reach a broader community.”