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Not by TikTok alone: Kuaishou is the largest IPO after Uber

Friday, February 5, 2021

Startup Jedi

We talk to startups and investors, you get the value.

TikTok is an app of the Beijing-based company ByteDance, which was launched in 2018, immediately took the Chinese market, and then began a victorious expansion to other markets. Today, the app is included in all the mobile applications tops — the service is very popular with generation Z representatives. The platform’s bloggers become mainstream celebrities, the audience is growing exponentially. Impressive advertising budgets that brands invest in their promotion in TikTok, bring large sums of revenue to ByteDance.

But everything is not that easy for the company. One of the most high-profile news about the application addresses its blocking at the state level in several countries: it is already banned in India, also there were discussions about its ban in the United States during the previous year. The second important event: its competitor, Kuaishou, went public, opening its shares in Hong Kong. The shares showed an increase of 194% of their price during the first day. As a result, the company received $5.4 billion — experts call it the largest listing after Uber’s. The company’s shares attract both institutional and private equity investors.

Unlike other similar Western products and the main competitor TikTok, Kuaishou receives the greater part of income from the donates system during live streams, rather than from advertising. Monthly active audience of the app reaches 481 million users, 305 million of which are active during the day: an impressive percentage of them donates to their favorite streamers. The platform also allows bloggers to create and sell their merch: in terms of the sales volume, the company is close to Taobao, a giant from Alibaba.

But don’t forget about the origin of the application and the country where it is developing its business. The Chinese authorities have expressed their concern about the streaming donation market: the government has banned users under the age of 18 from buying such electronic “gifts” and limited the maximum number of the stream participants. The strict state-level rules governing the Internet in China impede the growth and expansion of the companies like Kuaishou. The latter, in addition to these difficulties, has a number of competitors both in streaming and in broadcasting short videos (even the WeChat giant launched its video broadcasts recently). Nevertheless, such a successful market entry will provide an excellent push for further growth of the service.

5 Feb 2021


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