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China Concept Stock IPO: Voice Chat APP Yalla Group Limited (YALA) (2016)

Yalla Technology (Yalla Group Co., Ltd.) Yalla Group Limited (NYSE: YALA) was founded in 2016, headquartered in Dubai, UAE, R&D department is located in China, and has local customer service in various business coverage areas such as the Middle East and South America The team, Yalla has covered more than 100 countries around the world, has millions of chat rooms (many-to-multilingual chat mode), distributed in the United Arab Emirates, Saudi Arabia and Kuwait and other countries, which can support Arabic, Spanish, Turkey There are 8 languages ​​in total.

Yalla Group Limited

Yalla Group Limited (YALA):

Yale Technology is a social chat APP developer. At present, Yalla Group has two products, the voice chat room App—Yalla, and the chess and card game social App—Yalla Ludo. They have achieved good results in the best-selling lists in the Middle East and North Africa. . In a sense, Yalla can be regarded as an “online cafe” for chatting and recounting the past, while Yalla Ludo can be regarded as a “family living room” that mainly provides casual game services.

Among them, Yalla has covered more than 100 countries around the world, with millions of chat rooms distributed in the UAE, Saudi Arabia and Kuwait. It can support a total of 8 languages ​​including Arabic, Spanish, and Turkish. According to Frost & Sullivan’s data, Yalla is already the largest voice social entertainment platform in the MENA (Middle East and North Africa) region in terms of revenue in 2019.

Yalla put search, discovery, world channel and other independent areas of the app on the “Room” page, and added the “Moments” function. The settings of this area are very similar to Weibo, and users can choose whether to post updates with topics. , Topics include Yalla activities, rainy memories, pets, food, and many other topics with communication and discussion.

Like the well-known Ludo head App Ludo King (built-in Ludo and Snakes and Ladders games), Yalla Ludo also has two built-in games. In addition to Ludo, based on Yalla’s observations of Middle Eastern users, Snakes and Ladders are replaced with Domino (Domino). ).

In addition to the voice chat for players in the game, the most distinctive feature of Yalla Ludo is the introduction of the “Majlis (Parliament)” function. To put it bluntly, it is actually embedding a streamlined version of Yalla into Yalla Ludo for players to chat inside.

In Majlis, the design of the room is very similar to Yalla, and even the gifts are the same. In the voice room, gold coins and gems can be exchanged for gifts. According to Yalla Ludo’s recharge interface (as shown below), 1 USD = 240,000 gold coins = 533 diamonds. Most gifts in the room are set within 2 USD, with the largest face value. The gift from Yalla is 375 US dollars, and the cheapest one only costs 1,000 gold coins. These are not much different from Yalla.

Among them, Yalla has covered more than 100 countries around the world, with millions of chat rooms distributed in the UAE, Saudi Arabia and Kuwait. It can support a total of 8 languages ​​including Arabic, Spanish, and Turkish. According to Frost & Sullivan’s data, Yalla is already the largest voice social entertainment platform in the MENA (Middle East and North Africa) region in terms of revenue in 2019.

From the perspective of product attributes, the biggest feature of Yalla that distinguishes it from domestic live broadcast platforms such as Douyu and Huya is that there is no one-to-many anchor form. Yalla’s chat room is a many-to-many voice chat mode. Every user can chat on the microphone and share their own stories. In other words, Yalla is more inclined to maintain the equal identity of each user on the platform, encouraging users to share and participate boldly and actively, thereby forming a more active and healthy user community. In addition, there are no advertisements on the Yalla platform, and the source of income is mainly users’ consumption of virtual items and upgrade services.

Yalla’s core start-up team has been working in the Middle East for many years. For example, CEO Yang Tao was previously responsible for ZTE’s business in the Middle East and has worked there for 15 years; while President Saifi Ismail has lived in Dubai for a long time and worked for Emirates Telecom , Has a good understanding of local supervision.

Yalla Technology Yalla Group Limited (YALA) Prospectus:

  • The prospectus disclosed that Yalla’s existing shareholders and well-known US dollar fund Orchid Asia Investment Group intends to subscribe for up to US$30 million worth of ADS at the IPO price to show Yalla’s long-term optimism.
  • In 2018 and 2019, Yalla’s operating income was US$42.37 million and US$63.46 million, a year-on-year increase of 49.8%; revenue for the first half of 2020 was US$52.76 million, an increase of 99.6% from US$26.43 million in the same period in 2019.
  • In 2018 and 2019, Yalla’s net profit was US$20.24 million and US$28.92 million, respectively. The net profit in the first half of 2020 was US$25.19 million.
  • In the fourth quarter of 2019, the average monthly active users of Yalla increased by 90.9% from 2.2 million in the same period in 2018 to 4.2 million; in the second quarter of 2020, it further increased to 12.5 million, a year-on-year increase of 387.3%.
  • In the first half of 2020, a total of 10.6 million users on the Yalla platform participated in voice social networking in 3.3 million rooms, of which 2.3 million users chose to participate by giving virtual gifts.
  • In the second quarter of 2020, each active user spent 4.5 hours on Yalla voice chat every day and 1.4 hours on Yalla Ludo for casual games.
  • Before the IPO, Yalla founder and CEO Yang Tao held 48.8% of the shares, and co-founder Xu Jianfeng held 9.7% of the shares; among the external investors, Lanxin Asia Investment Group and SIG Haina Asia Venture Capital Fund each held 21.9 % And 7.3% of shares.
  • After the IPO, Yang Tao will continue to own 42.5% of the shares and 86.5% of the voting rights, Xu Jianfeng will hold 8.5% of the shares and 2.0% of the voting rights; and Lanxin Asian Investment Group and SIG Hainer Asia Venture Capital Fund The shareholding ratio will be 19.0% and 6.3% respectively.

Yalla Technology Yalla Group Limited (YALA) investment:

Yalla Technology (Yalla Group Co., Ltd.) Yalla Group Limited (NYSE: YALA) listed on NASDAQ on 9/30/2020 IPO, issue price $7.50, issue 18.6 million shares, raise 139.5 million US dollars, Morgan Stanley Li, Haitong International, Tiger Securities underwriting.

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