Photographer: Qilai Shen / Bloomberg
Photographer: Qilai Shen / Bloomberg
In China’s popular online streaming industry, virtual gift giving is big. You can send your favorite live performer anything from a rose for 5 yuan (80 cents) to a space rocket for 500 yuan.
The gift is just a symbol, but the money is real – and that’s what made Kuaishou Technology so successful.
The rival of ByteDance Ltd. has become the largest live streaming virtual gift platform, with more paying monthly users than any other in the world. The company, which takes some of the tips fans give to artists, raised $ 5.4 billion in Hong Kong in the largest IPO on the Internet since Uber Technologies Inc. in 2019, terms of the deal obtained by Bloomberg.
Also read: Chinese video App Kuaishou Raises $ 5.4 Billion in IPO in Hong Kong
That’s poised to create at least four billionaires with a combined $ 15 billion fortune, based on the property being revealed in Kuaishou’s prospectus. Co-founders Su Hua and Cheng Yixiao will each be worth more than $ 5.5 billion, the company said Bloomberg Billionaires Index.
Get rich quick
Four Kuaishou executives are about to become billionaires
Source: Bloomberg Billionaires Index
Kuaishou, meaning ‘quick hand’, is one of China’s greatest internet success stories of the past decade, part of a generation of startups that thrived with the support of Tencent Holdings Ltd. Along with TikTok parent ByteDance, the outfit pioneered the live streaming and bite-sized video format that has since been adopted around the world by Facebook Inc.
“The main source of the Internet is attention,” Su wrote in Kuaishou’s official biography in 2019. “It can be aimed at large numbers of people, like the sunlight, instead of a spotlight only on a certain group of people. That’s the simple logic behind Kuaishou. “
Born in China’s central Hunan province, Su studied computer programming at the prestigious Tsinghua University before joining Google in Beijing in 2006. There he made about $ 23,000 annually, eight times as much as the country average salary then. Although he said he was “extremely happy,” a stay in Silicon Valley inspired him to start his own business, according to Kuaishou’s biography.
The 38-year-old left Google during the global financial crisis to start his own video ad business, which failed to materialize. After a short stint at Baidu Inc., he met Cheng in 2011 and they soon decided to go together. In 2013, the duo transformed the Kuaishou app from a GIF maker to the social video platform it is today, initially gaining popularity with its videos about rural life in China.
With the emergence of ByteDance’s Douyin, TikTok’s Chinese twin app, Kuaishou expanded its appeal by luring influencers backed by talent agencies and pop stars like Jay Chou from Taiwan. Gradually, it accelerated monetization by creating ad spaces and in-app stores for brands and sellers.
While buying virtual gifts is still its bread and butter – they make up nearly two-thirds of its sales – the company is delving deeper into higher-margin businesses such as ecommerce and online gaming. According to the IPO prospectus, sales in the first nine months of last year increased by nearly 50% to 40.7 billion yuan.
More than virtual gifts
Kuaishou is diversifying into areas such as e-commerce and online games
Source: Kuaishou
Viewers spend an average of nearly 90 minutes each day on Kuaishou, and about a quarter of monthly users also produce content. While that robust commitment sets Kuaishou apart from rival live streaming platforms like Joyy Inc. and Momo Inc., has the recent launch of a short video feed by Tencent’s super app WeChat has taken the competition to another level.
Kuaishou’s debut could also be overshadowed by the potential IPO of its much bigger rival, ByteDance, whose 600 million Douyin daily users are more than double Kuaishou’s. Last rated on $ 180 billion would be the world’s largest startup investigating a list of some of its companies in Hong Kong, as the US tried to ban TikTok last year and force a sale of the app over national security concerns.
“Kuaishou has overhauled its product and become more like Douyin,” Wang Guanran, an analyst at Citic Securities Co., said in a Jan. 26 note. “The two will face direct competition with each other in the future.”
Can not get enough
Kuaishou has become China’s largest mini video app after Douyin
Source: Kuaishou
Kuaishou is also not immune to geopolitical tensions. While Su told investors on a Jan. 25 appeal that non-Chinese markets have the potential to become a major source of income, his platforms, including Kwai and Snack Video, have been banned in India along with hundreds of Chinese apps, now New Delhi and Beijing collide across the border. disputes. In the US, the TikTok-style Zynn service has gained little traction since its launch in May last year.
The company is also dealing with a recent one crackdown on live streaming. China said in November that it would require artists and donors to register with their real names, prohibit minors from tipping, and asked the platforms to limit the value of virtual gifts.
Still, investors are rushing to get their hands on some of the first short video platform to be traded on February 5th. The IPO was at the top end of the marketed range, and the retail portion was it according to IFR, most have ever subscribed as the market for new listings in the city has been on fire lately. Last year’s enthusiasm bolstered the fortunes of the top executives, including Zhong Shanshan of Nongfu Spring Co. – now Asia’s richest person – and Pan Dong of Blue Moon Group Holdings Ltd.
The founder of Kuaishou is careful about the strength he has amassed. In the company’s biography, Su compared his platform’s ability to control Internet attention and traffic with the One Ring from JRR Tolkien’s “The Lord of the Rings” trilogy.
‘When you put on the ring, you do to feel extraordinarily powerful, ”he wrote. “But in fact it is the ring and the force that controls you.”
– With the help of Pei Yi Mak
(Adds pricing information in the 16th paragraph)