- Bytedance seeks pre-IPO of $2 billion
- KuaiShou was founded in 2011 as a GIF sharing app
- It has strong domestic growth but limited overseas success
All over the world, ‘short-video’ apps have seen a popular rise. Especially among the younger generations, where it has grown at a staggering rate. TikTok, Douyin, and KuaiShou are among the top short video apps. Rumors have surfaced about TikTok’s parent company, ByteDance’s move to go public. KuaiShou has already filed for an IPO in Hong Kong.
According to a report by Bloomberg, ByteDance is seeking a pre-IPO round of about $2 billion. It is currently valued at $180 billion. KuaiShou’s rush to file the initial public offering tells about the race to growth. China has already exported many of its innovative tech around the world. With apps like these, China has reinvented modern-day video consumption.
The app was developed by a former Google engineer in 2011. It was initially made for sharing GIFs over the internet. But it evolved gradually and adopted the short-video format. It now competes against Douyin and TikTok, sister apps owned by ByteDance. Tencent Holdings has a 21.5% ownership in KuaiShou. It reported a loss of $1 billion (about 6.8 billion yuan) in the first half of 2020. It bore an operating loss of 7.57 billion yuan as well. However, its last year’s report showed an operating profit of 1.1 billion yuan.
The company’s aggressive promotion of its lite version may have resulted in the profits. KuaiShou Express, the lite version of the app, tailors to China’s less tech-savvy demographics. However, unlike ByteDance, KuaiShou’s success overseas was quite limited. It mostly relies on continuous domestic growth.
Its losses have piled up this year. This can be attributed to its selling and marketing expenses. Its spendings have shot through the roof. The marketing expenses have seen a growth of 354.1%. It stood at 13.7 billion yuan in H1 2020 as compared to 3 billion yuan in H1 2019. As a result, its lite app has gained 100 million daily active users within the span of a year. The primary app, KuaiShou, has touched 302 million daily users. Its users spent more than 85 minutes on the app per day.
The short-video app earns most of its revenue from live streaming. During these sessions, viewers can send hosts virtual items. The app reported a revenue jump of 68.5% in H1 2020. It also earns via advertising and sources like e-commerce and online games. Advertising through the app has monetized 28% of its revenue stream. The sector will see further growth as these companies go public.