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Chinese E-Learning Firm iHuman Seeks Up to $100m in U.S. IPO

By DealStreetAsia / Sep 11, 2020 04:44 PM / Business & Tech

iHuman, one of China’s childhood edutainment companies, has listed the size of its US initial public offering (IPO) at $100 million, a placeholder amount likely to change, according to a filing.

The company’s prospectus is highly redacted. It plans to list its American depositary shares (ADSs) on the New York Stock Exchange under the symbol IH, joining a string of other Chinese firms fundraising int he US amidst the ongoing China-US tensions.

iHuman, which launched its online operations in 2016, providers learning applications targeting children aged between three and eight. Aside from e-learning apps, the company also provides educational games and audiobooks.

In its filing, the company said its learning apps have attracted a user base of 10.3 million average monthly active users in the second quarter of this year and 1.4 million paying users.

It reported a net income of 5.6 million yuan ($820,000) for the six months ended June 30, reversing a net loss of 271.8 million yuan ($40 million) in the same period last year.

In terms of revenue, iHuman said it generated 218.7 million yuan ($32 million) in total revenues in 2019, with learning services revenues increasing nearly five-fold to $15.2 million. From January to June, the firm’s revenue nearly doubled to $26.3 million from the same period last year.

iHuman operates in China’s content-based complementary childhood education market, which is forecast to grow to 460.9 billion yuan in revenue in 2024, from 111.4 billion yuan, according to consultancy firm Frost & Sullivan.

“The childhood education industry in China is evolving and competitive, and we expect competition in this sector to persist and intensify as more players may enter this promising market,” iHuman said.

The company mainly generates revenues from users’ paid subscriptions for the premium content of our learning apps, as well as the sale of learning materials and smart learning devices to both individual users and education organizations.

Proceeds from the IPO will be used to further expand the company’s product and services offerings, both domestically and overseas. iHuman also intends to develop its existing offerings and embark on marketing and brand promotions using part of the amount that will be raised from the offering.

“Although we have developed a large and rapidly growing user base, to continue to do so, we must attract users by continuing to expand the scope and improve the quality of our product and service offerings,” iHuman said.

Other Chinese education firms that have listed in the US include GSX Techedu Inc, which raised $208 million last year. Youdao Inc, an e-learning unit of Chinese internet technology company NetEase Inc, also filed for an IPO on the New York Stock Exchange in October

Related: Chinese Online Educator Zuoyebang Receives $750 Million Investment

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