Two years to win the city's "non mainstream" interest headlines to achieve listing in the United States
Authors: Li Tian and Zhang Jingchao
On Sept. 14, the mobile content aggregation platform finally made headlines on the Nasdaq Stock Exchange. The stock code is "QTT". It is understood that the main underwriters of the IPO are Citibank, Deutsche Bank, UBS Group and Certificate International. The final price of the IPO is $7/ADS, excluding 12 million shares issued by green shoes. The National Depositary Receipt, with a financing of $84 million and a market value of about $2.1 billion, provides financial advisory services for interesting headlines.
Interesting headlines were launched in June 2016, and then grew rapidly into a dark horse in the mobile information field.
Analytical data from third-party research institutes show that in July 2018, the daily penetration rate of interesting headline APP reached 4.2%, second only to today's headlines in this area. According to the prospectus, the interesting headline APP reached about 48.8 million MAUs in July, with an average DAU of about 55.6 minutes and a cumulative installed capacity of 154 million.
The capital soon sniffed the smell of blood and knocked on the door.
In March, the headlines completed more than $200 million in B-round financing, and in the second half of 2008, the headlines introduced strategic investors, including the People's Net fund, with an investment of nearly $60 million. In the IPO subscription, Jingdong has offered $40 million subscription intention.
"It may be urgent to go public now, but on the contrary, it is not easy to find investors in the primary market. If the secondary market can go, it is also a good choice." A former VC practitioner told the China business newspaper reporter.
There was advertising revenue in the early years of creation.
Interesting headlines show the characteristics of "not taking the unusual path" from the beginning.
The "loyalty score" is the way to get customers. Users can read and comment according to the rules of the platform to generate a certain loyalty score, which can be converted into cash. Interesting headlines through this way to mobilize interpersonal communication, and produced a "higher than the market stranger customer transformation effect". Similar ways of getting customers have been used for online advertising and dividends, while interesting headlines have been used for news and information.
The 345 tier cities and other sinking markets are a solid market. According to the statistics from Yiguan, in 2017, more than half of mobile Internet users concentrated in the sinking market, with a total population of 1 billion people and 500 million mobile devices, with an average of 0.5 mobile devices per person.
Some capitalists believe that the third demographic dividend of China's Internet is the mainstream consumer market of urban households in the 345 front-line cities. They are the 400 million to 500 million people who finally entered the mobile Internet in China. Fast hand and millet are essentially the market.
This is also true in the mobile content domain.
Previous interesting headlines to reporters, for example: "The content needs of people in the sinking market and second-tier groups have some differences, such as they like square dancing, health care content, and now most of the content platform is to serve the first-tier and second-tier market groups, the content needs of people in the sinking market can not be met." The social environment of the corresponding group is relatively closed, and the demand for online entertainment content is relatively high.
Seeing and meeting this market demand makes interesting headlines form a differential competitive advantage in the industry. It is reported that most of the interesting headline users are their own seed users, and their overlap with today's headline users is only 20%.
In addition, two years ago, China's Internet community was rife with the idea of using subsidies to trap users before building a business model, but interest headline executives initially equated user growth with business liquidity, making interest headlines a good cash flow from the first year.
According to the prospectus, the main source of interesting headlines is information stream advertising, which bills advertisers per click or per thousand displays. In 2016, Interesting Headlines achieved revenue of 58 million yuan, in 2017, revenue rose 517 million yuan, in the first half of 2018, Interesting Headlines revenue has reached 718 million yuan.
Interesting headlines to achieve advertising revenue mainly through Baidu and a number of third-party advertising agency platform cooperation. Reporters noted that the fun headlines had quietly passed the capital operation as their own revenue increase. In February 2018, Interesting Headlines acquired an advertising agency that operates a programmed advertising system to help it reduce its dependence on third-party platforms such as Baidu.
An interesting headline operator told reporters that if advertisers seek to settle in, interesting headlines will conduct a comprehensive review of their qualifications, including whether they have done similar operations in the platform of friends. In the view of this operator, information flow products are also part of the platform content, and should be treated strictly according to (content) auditing standards.
In terms of interesting headline operating expenses, the prospectus shows that sales and marketing costs account for about 80%, which is mainly reflected in the cost of customer loyalty points. In 2016, the expenditure was 54 million 630 thousand yuan and 495 million yuan in 2017. At present, interest headlines are in a state of loss. The net loss was 10.9 million yuan in 2016, 94.8 million yuan in 2017 and 514 million yuan in the first half of 2018.
Although interest headlines are not profitable yet, compared with their revenue, operating cash flow provides ammunition support for the development of interest headlines. In addition, interesting headlines have completed two financing this year, together with the post-listing fund-raising, will create a pool of funds for interesting headlines.
It is understood that fun headlines are increasing the flow of purchase costs, to achieve pull new. Interesting headlines to reporters mention its business logic: Interesting headlines are currently basically over 100 million users, user penetration is not low, objectively need to find a more diverse way to get customers. Based on the integral operation mechanism of interest headlines, the external flow of interest headlines will become new seed users and bring more users, so it is necessary to purchase outside.
The new opportunity lies in the content ecology matrix.
Quest Mobile, a third-party data analyst, argues that interesting headlines are highly efficient, but should not be long-term independent. Quest Mobile suggests incorporating them as part of the business logic or building a complete business loop based on this core to avoid the risk of sudden and complete overthrow due to regulation.
At present, the controversy around interesting headlines basically lies in whether its unique means of operation can be benign and sustainable. It is understood that foreign countries have similar operation model, but can continue as interesting headlines for two years very little time, which seems to have proved that the way to face the domestic community can be practical. At present, this mechanism still has the competitive potential. The user login rate of other information aggregation platforms is less than 30%, and the user login rate of interesting headlines can reach 95%.
From the information displayed in the prospectus, the "ambition" of the interesting headlines is indeed not limited to the existence of this mechanism alone. In advertising advertising, interest headlines are considering increasing direct sales of advertising solutions. Reporters noted that the IPO fund-raising funds will be used primarily to expand and strengthen the content system.
At present, the content of headlines is close to the traditional way. It cooperates with more than 200 institutional media and more than 230,000 private media, with content auditing departments taking the lead. It is reported that there are more than 1000 employees interested in headlines, of which nearly 600 people do audit work.
In terms of content, interesting headlines have gone through the vulgar stage of being questioned, and there are similar queries in the process of preparing for listing. Some people in the industry believe that the unique operation mode of interesting headlines naturally leads to the output of social and entertainment, which is unavoidable, and after the early expansion of interesting headlines are doing quality content introduction, seeking transformation.
Interesting headlines hope to create an eco-matrix of content. The prospectus shows that interesting headlines plan to enrich their presentation by introducing new forms of content, including literature, casual games, animation, comics, content-driven e-commerce and live broadcasting platforms, and interesting headlines pay for content. Count.
After the listing, investors can provide strong support for the follow-up development of interesting headlines. Tencent's Image Flag Investment (HK) Limited holds 5.42 million common shares, or 7.8 percent, according to the prospectus.
"We look forward to working more closely with Tencent in various areas, which we believe will bring us strategic benefits, bring us better growth prospects, and improve our access to capital." The prospectus reveals the vision of the headlines for alliance with Tencent.
Some people in the industry commented to the media that the listing of interesting headlines was also a key step taken by Tencent in the mobile content aggregation platform.
Opening the pace of investment and mergers and acquisitions will become practical, with interesting headlines aimed at potential targets for content and technology. Perfecting the licence will become a sufficient information provider, or it will be an interesting part of the headline.
It is reported that the core members of interesting headlines have worked in the grand network, and chairman Tan Siliang also has some investment experience, familiar with the capital market, the core team itself may also be one of the advantages of interesting headlines. In the future, whether these developments are likely to land, how to maintain a rapid momentum, how to sustain valuation, and whether to avoid the risk of being maliciously short will be the answer to the team.
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