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While it is generally expected that Agora in its IPO will not raise below $315 million, the maximum amount raised may turn out to be a big surprise.
The stage in the life of a business where it goes public is a significant milestone that can engender bigger innovations. There has been a surge in the number of Chinese companies making it to the exchange in recent times and thus gives a snapshot of the impressive ambitions these companies operate with. Few of the companies like Agora Inc are even making a more daring move by positioning themselves for listing on a foreign exchange. Currently, a big player in China, the company is set to raise $425 million in Initial Public Offering (IPO) on Friday.
The company has named the price range for its offering at $16 to $18 per American depositary share with a plan to sell 17.5 million shares. An additional 2.6 million ADSs may later be acquired by underwriters for over-allotment. While it is generally expected that Agora in its IPO will not raise below $315 million, the maximum amount raised may come off as a big surprise.
Agora Inc was founded by Tony Zhao who brought his wealth of expertise and experience working with YY.com to develop the voice communication features of WebEx to establish Agora. Agora is communication as a service (CaaS) company offering businesses a premium voice and video communications software for any application through a simple, powerful SDK. Agora enables software applications to support as many as 2,000 users on a single call. Agora also comes off as a B2B company whose customers provide HD real-time communication services to industries that greatly benefit from premium multimedia communications, including online dating, telemedicine, education, human resources, customer service, gaming, and social media applications.
Agora is currently based in China and the United States and powers about 40,000,000,000 minutes of human connection per month. Agora’s software is highly in demand and can easily be used by developers. In extending to the United States, the company believes they have a niche that the American market needs, and since it established its California Headquarters in 2015, it has experienced growth that is culminating in a bid to get listed on Nasdaq.
More about Agora IPO
In its filing to Nasdaq, Agora reported a Q1 growth in revenue by 165.7% making up $35.6 million. It posted a net income of $3 million the period, compared to a net loss of $700,000 a year ago. The company’s 2020 performance is one of the focal reasons why it believes it is fit for public listing. After being certified by Nasdaq whose listing guidelines got stricter in recent times, Agora will be listed with the ticker symbol API.
The proposed offering will be available for investment by means of a prospectus that will be available from the company’s IPO insurers Morgan Stanley, and BofA Securities Inc while Needham & Company will act as co-managers for the IPO.
Agora Inc has a product offering that is currently in demand. The new realities brought about by the coronavirus lockdown has made the world see the need to leverage on innovative means of communication. With proper handling and innovative strides to beat the existing competition, the listing of Agora on Nasdaq may be another frontier in the count of future trillion-dollar companies the U.S. will host.