'China's Facebook' Renren Plans Listing This Year
Renren.com plans to list in the US this year in a deal that could make the Chinese company one of the world’s first social networking sites the public can invest in.
The company plans to raise about $500m in an offering managed by Deutsche Bank, among others, said two people close to the situation.
China’s internet companies have mostly been followers, copying their larger and more mature US peers’ business models and adjusting them for their domestic market. But Renren’s planned listing could make it a leader in attracting investor funds.
As Facebook is not yet listed, Renren could become virtually the only choice for investors seeking to buy into the sector’s growth. The situation is similar with microblogs. While Twitter is not listed, investors can buy shares in Sina, Tencent or Sohu, the Chinese internet portals which all operate microblog services.
Renren was founded in 2005, a year after Facebook, under the name of Xiaonei, or “inside school”. In 2006, its founder sold it to Oak Pacific Interactive, a privately owned fund. The new management gave the site its current name, which means “everyone”. Although the company’s 160m registered users are far fewer than Facebook’s, it operates in the world’s most populous internet market. China had 457m internet users as of December 2010.
Renren has not published financial data but said its advertising revenues grew by more than 100 per cent last year and in 2009. No details were available on what value a $500m IPO would place on the company.
Many of Renren’s features closely mirror those of Facebook, with some adjustments for Chinese cultural preferences.
Facebook and other western social media sites, including YouTube, are blocked in China.
Neither Joe Chen, Renren’s chief executive, nor a company spokesman responded to requests for comment. Deutsche Bank declined to comment.