Sports Chinese E-Sports Firm VSPN Set for Hong Kong IPO, Tencent Holds 13.54% Stake

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According to domestic media outlet IPO Zaozhidao, Chinese e-sports company VSPN has filed a prospectus with the Hong Kong Stock Exchange on January 31 for listing on its Main Board, with Bank of America, CICC and Credit Suisse acting as joint sponsors.

Founded in Shanghai in 2016, VSPN is a total solutions provider for professional e-sports events across 29 well-known games, including Honor of Kings and PUGB Mobile. The firm offers a wide range of services, from e-sports event organization, content production, and talent incubation and management, making it the only company in China that covers the full breadth of the industrial ecosystem.

According to a report by Frost & Sullivan, VSPN ranks first in Asia in terms of the number of tournaments held in 2020, and first in China in terms of revenue generated from e-sports events operation and commercialization.

Since its founding, VSPN has received investment from Tencent, Focus Media, SIG Heiner Asia, Morgan Stanley Private Equity Asia, China Sports Capital (CSC), PAC Capital, Kuaishou, and so on. Tencent represents VSPN’s largest shareholder with a 13.54% stake, while Hou Miao, Tencent‘s e-sports division manager, is currently serving as a non-executive director at VSPN.

VSPN said in the prospectus that net proceeds from this IPO will be used primarily for research and development to advance e-sports-focused services and infrastructure technologies, improve content quality and the gaming experience, expand its business to targeted overseas markets, expand its e-sports and gaming-related products and service offerings, and upgrade its business model.

Tournament operation is VSPN’s core strength and the foundation of its business landscape. On the one hand, VSPN is the e-sports tournament operator for a range of games including Honor of Kings, PUGB Mobile, Crossfire, and Clash of Clans: Royal War. It is also the sole tournament operator for King Pro League (KPL), now the largest mobile gaming league in the world.

On the other hand, VSPN has expanded its business by partnering with Tencent, Garena, Krafton, and others to reach players and audiences across Asia. In 2020, VSPN operated 77 gaming events for 21 titles in China and overseas with over 2,000 matches. In the first three quarters of 2021, VSPN operated 94 gaming events for 29 titles in China and overseas, with approximately 5,600 individual matches.

With the acquisition of Banana Gaming & Media in January 2021, VSPN further consolidated its dominant position in the domestic market while also strengthening its presence overseas, and has now become the world’s largest e-sports operator.

In the first three quarters of 2021, VSPN’s revenue saw an increase of 144% from the same period in 2020, hitting an astonishing 1.322 billion yuan ($207.8 million), among which the revenue generated by tournament operation, commercialization and community operation accounted for 35.3%, 34.1% and 25.9% respectively. In the same period in 2020, however, VSPN’s business still relied heavily on the operation of e-sports events, which accounted for 60% of its total revenue.

SEE ALSO: VSPN Secures Multi-Million Series B2 Financing Round Led by Morgan Stanley