Metaverse Social App Soul Targets Public Listing in Hong Kong

Tencent-backed metaverse social media platform Soul App is looking to go public by listing on the Hong Kong stock exchange according to paperwork filed this week.
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Quick take:

  • Chinese metaverse dating platform Soul App is vying for a public listing on the Hong Kong stock exchange. 
  • The company cancelled a plan to sell shares in the US last year.
  • The company this week filed paperwork for a potential listing, revealing a $194 million loss for last year. 

Soul App is planning to go public via the Hong Kong stock exchange according to paperwork filed this week. The Chinese metaverse dating app’s latest move comes after cancelling plans to sell shares in the U.S. last year.

In the paperwork filing, the company reported a loss of Rmb 1.3 billion ($194 million) last year after expenses came in twice the revenue.

The social media app promoted under the pseudonym “Soul”Cial allows users to socialize using 3D avatars in the metaverse. Soul has approximately 32 million users according to a report by FT, many of who use the app for dating.

The platform utilises an algorithm that connects people using their personality and interests, the same strategy used by TikTok. It is backed by China’s largest company Tencent Holdings, which holds a 49.9% stake since 2020.

Soul’s avatars are based on Japanese anime, instead of real profile pictures. Users can also interact by playing immersive games in the Soul metaverse.

One user, who according to FT asked to remain anonymous lauded the platform’s ability to allow users to express themselves without posting their real pictures as a huge benefit.

“You don’t have to post pictures, so you can just be yourself in front of total strangers and say whatever you truly want to say,” the person said.

Whether Soul succeeds in its plans to list on HKE is another thing. The platform couldn’t have chosen a worse time to launch its bid for raising capital from the public. The crypto market has crashed recently and this has had its impact on emerging industries like the metaverse. 

Moreover, traditional investors have become more cautious about their stock picks amid declining global prices. Unprofitable companies are likely to find it more difficult to attract investors during the market downturn.

Another drawback that Soul App could face emanates from China. The Asian nation has an unpredictable legal framework for companies involved in the crypto industry. The metaverse is mainly built on Web3 (the next iteration of the internet).

Although some reports have claimed Web2 metaverse platforms could still compete with their web3 counterparts, decentralisation is seen as a key driver for rapid adoption.

Chinese podcasting platform Ximalaya recently pulled the plug on its plans to raise $100 million via a public listing in Hong Kong, after regulation remained unimpressed by its sales pitch. 

Therefore, Soul’s attempt to go public could prove more difficult given the series of hurdles it faces in its quest.

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