YY raises $1 billion in convertible note offering as it eyes global expansion
Jun 25, 2019
Chinese live-streaming social media company YY on Monday announced that it has raised a total of $1 billion in a convertible senior notes offering, according to an announcement, as it seeks to fund expansion into overseas markets.
Half of the total amount, or $500 million, will mature in 2025 and the other half will be due in 2026. Initial purchasers exercised their right to purchase $75 million of each kind of note, totaling $150 million.
Proceeds from the offering will be used for related capped call transactions, global expansion, enrichment of video-based content offering, technology, and general purposes, the company said.
YY, the owner of live-streaming platform YY Live and Huya, saw steady growth in net revenue and monthly active users (MAU) the first quarter of 2019. According to the company’s financial results, combined MAUs of YY’s global video and live-streaming services reached 400 million as of the end of the Q1 2019, with around 75% coming from overseas markets.
The company’s net income in the first quarter also surged 224% year-on-year, mainly due to measurement gains of its previously held interests in Bigo, a Singapore-based live-streaming service provider that YY acquired in March.
According to CEO Li Xueling, Bigo’s main live-streaming product, Bigo Live, have been expanding out of developing countries to developed countries, where the app earns around 20% of its revenue.
However, operating expenses during the first quarter of 2019 almost doubled, as the company stepped up its overseas marketing and sales efforts with Bigo and Indonesian focused game-based social app Hago.