Tencent-backed Sogou aims for up to US$585m in US IPO

[NEW YORK] Sogou Inc, the Chinese search engine backed by Tencent Holdings Ltd, aims to raise as much as US$585 million in a US initial public offering.

The company, born from the Chinese media company Sohu.com Inc, is marketing 45 million American depositary shares for US$11 to US$13 apiece, according to a filing Friday with the US Securities and Exchange Commission. Sogou said it intends to use the proceeds for research and development and sales and marketing.

Sogou is the default search engine in Chinese tech giant Tencent's Mobile QQ browser and qq.com, according to the filing. Sogou said it's exploring additional ways to collaborate with Tencent.

Tencent is also Sogu's largest shareholder. It has a 44 per cent stake before the offering, while Sohu holds 38 per cent.

Sogou's filing follows a rush of cross-border listings that may make October the biggest month of the year for US IPOs, with trans-Pacific share sales at a level not seen since Alibaba Group Holding Ltd's record US$25 billion IPO in September 2014.

Chinese online lender Qudian and China's Rise Education Cayman, along with Singapore-based Sea, the owner of the Garena gaming platform, went public in the past two weeks, selling a combined total of US$2.1 billion in new shares.

Beijing-based Sogou had net income of US$56 million on total revenue of US$660 million in 2016, according to its filing. The company posted net income of almost US$100 million on revenue of US$592 million the previous year.

JPMorgan Chase & Co, Credit Suisse Group AG, Goldman Sachs Group Inc and China International Capital Corp. are leading the offering. The company intends to apply to list its shares on the New York Stock Exchange under the symbol SOGO.

BLOOMBERG