Newborn Town to Acquire BlueCity in Move to Expand into Global Online Social Networking Market

HONG KONG, March 27, 2023 /PRNewswire/ -- On 23 March 2023, Newborn Town (9911.HK), the company with diversified social networking services, announced the signing of a sale and purchase agreement with Spriver, pursuant to which Newborn Town has agreed to acquire the entire issued share capital of Chizicheng Strategy Investment, a wholly-owned subsidiary of Spriver. Upon completion of the acquisition, Newborn Town will become the controlling shareholder of BlueCity and consolidate the financial statements of the soon-to-be new subsidiary.

In January 2022, BlueCity, a leading LGBTQ digital platform, announced receipt of a preliminary non-binding proposal from the buyer. In the same month, Newborn Town announced its participation in the privatization of BlueCity through MetaClass Management ELP. In August 2022, BlueCity announced the completion of its going-private transaction and delisting from Nasdaq.

With the signing of the agreement with Spriver and upon the completion of this transaction, BlueCity's social products, which includes its leading LGBTQ app "Blued", will be incorporated into Newborn Town's global portfolio of social networking apps. This transaction is part of Newborn Town's broader growth strategy and aligns with its mission to provide an innovative solution that meets the evolving needs of its users while promoting a more inclusive and equitable society. 

The synergy between Newborn Town and BlueCity is significant. Having accumulated years of experience in research and development and localization of apps at a global scale, Newborn Town has established a comprehensive lineup of social-oriented applications focusing on streaming, audio and interactive entertainment, covering key markets including Japan, Korea, North America, Southeast Asia and the Middle East.

With 40% of its active users located outside of China, BlueCity has established a proven business model that focuses on inclusivity and diversity at a global scale. The combined expertise of Newborn Town and BlueCity aims to leverage technology to facilitate social interactions through multiple channels across different verticals.

According to a report released by market research firm Frost & Sullivan, the global online LGBTQ social entertainment market is anticipated to reach US$8.7 billion by 2025. As a validation of the potential behind the LGBTQ market, several social apps with a global footprint have also incorporated LGBTQ social elements in their products over the past few years to promote an inclusive society and greater social value.

BlueCity is a leading player in the LGBTQ social vertical with its flagship Blued app as the second-largest LGBTQ platform globally in terms of active users while holding the leading position in terms of users in several Asian countries and regions.

According to published data, BlueCity's revenue from ex-China markets accounted for only 12% of the platform's total while, in terms of the user base, the number of users in those same markets represented some 40% of its total number.

This implies significant revenue upside potential from the markets outside of China as Blued retains and monetizes its engaged user base that has a daily time spent of approximately 40 minutes.

In addition to expanding BlueCity's global commerciality and footprint through BlueCity's family of apps, Newborn Town aims to successfully balance its commitment to promoting and facilitating social connections with the practical realities of operating in diverse markets around the world.

By doing so, Newborn Town looks to expand its reach and impact while building a strong reputation as a leader in the global social networking field.

SOURCE Newborn Town Inc.