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Kuaishou Technology (01024): All You Need To Know About this Hottest IPO in Q1 2021

China’s second most popular video sharing application, Kuaishou by Kuaishou technology was founded by Cheng Yixiao and Su Hua in March 2011. The company has its headquarters in Beijing, Haidan district. The video sharing application called Kuaishou by Kuaishou technology is highly popular in China’s tier 1, 2 and 3 cities. It is also among the highest downloaded application across eight countries in the world.

In 2019, Kuaishou technology crossed the active daily user limit and hit above the 200 million mark. Under the leadership of Su Hua, Kuaishou technology has grow leaps and bounds. It has also put Su Hua at 132 positions in China Rich List 2020 and at 172 positions in Billionaires list 2020, according to Forbes. Su Hua has done his graduation from Tsinghua University, China, having work history with Google and Baidu.

Formerly, the video sharing mobile app was known as GIF Kuaishou, which was primarily conceived to produce GIFs. With the creation of video sharing feature in 2012, Kuaishou has become China’s No.2 video sharing app after ByteDance’s Tiktok.

Kuaishou financial profile

In 2019, the pre IPO valuation of Kuaishou technology was $25 billion. The number of investors in the company has considerably gone up since its inception. Recently, Tencent Holdings and Canada Pension Plan Investment Board have joined the list of its investors. Tencent owns a big over 21% stake in the company while, founder and the CEO own 12.6% and 10% of stake, respectively.

Kuaishou technology has received 14 rounds of investments until now in eight funding rounds. In Jan 2020, Kuaishou technology has raised over $4B of funding through Private Equity. The company has about eight investors including 5Y Capital, DCM Ventures, Temasek Holdings, YF Capital, Sequoia Capital China. There are 3 lead investors in Kuaishou technology and number of lead investments stands at 6.

Tencent Holdings invested $350 million in 2017 into Kuaishou technology. The negotiation and collaboration of Tencent with Kuaishou created lots of positive sentiments for the company in the market. Kuaishou technology was rated eighth biggest unicorn in the world and second biggest in China, as per Hurun Global Unicorn Index.

Kuaishou IPO valuation

Latest figures suggest the company has user base of 258 million of daily users and 485 million monthly users. It has also been criticized recently for using costly means for daily user acquisition. However, it will manage to raise $5 billion with regard to pre IPO deal.

According to Pitchbook, Kuaishou was valued at over $28 billion in February 2020, giving tough competition to powerful firms like Airbnb and SpaceX, in terms of market valuation. The video sharing app is also ready to file for IPO which is being jointly sponsored by China Renaissance Holdings Ltd, Bank of America Corp, and Morgan Stanley. It has also decided to debut in the Hong Kong IPO, which can escalate its worth further to around $60 billion. Meanwhile, it was reported that the company has suffered above 68 billion yuan (Chinese currency) loss since June 2020. And is trying hard to recuperate from an earlier loss of 268 yuan (Chinese currency) per year.

Kuaishou acquisitions

In its recent acquisitions, Kuaishou technology has acquired Easylink Payment Co. Ltd for $45.6 million. Following this, Kuaishou will be owning more than 50% of the stake in Guangdong based Foshan, a online payment licensing entity. Aside from this, along with Weibo, Kuaishou technology has acquired Honor of Kings YTG. The company has also facilitated funding of Vastai technologies, full stack developer and chip designer.

Business profile

Kuaishou technology has five main team members – Hua Su (Founder), Peter Yu (Director of Video Engineering), Yitian Wu (Senior Product Director), Hongbin Ma (Head of Strategy), Kukuh Prayogi (Head of Marketing). In the past few years, Kuaishou technology has invested massive efforts in gaming zone and ecommerce domain. An inbuilt game was also launched by the company in 2018 which gave user the option to play video game within the video application. In October 2019, Kuaishou technology has developed a separate video sharing platform for minor user called Taizan, which allows app sharing existing Kuaishou app – restricting new video uploads.

In terms of features, it earned massive revenue of over $7 billion in 2019 through live-streaming feature alone. This video sharing application also has a market of approximately 8% in the live streaming segment of China, slightly under other streaming apps like Taobao Live, and Douyin. Additionally, the Hollywood style special effect feature option has raised the popularity index of Kuaishou application in rural Chinese areas, also. This has sky-rocketed the growth of the app in past five years duration. Aside from special effects, plenty of other features backed by Artificial Intelligence, AR based filters, and enticing background music, the application works on the basis of multi-model recommendation engine for users. Kuaishou set up its Y lab research wherein, extensive research is being carried out on developing specific algorithms to enhance the features of the app.

As per the Sensor Tower Sore Intelligence report, KWAI, Kuaishou’s video sharing app name in the overseas posted a growth of over 50% year on year. And the main source of Kuaishou’s revenue came from its country of origin, China. In overall revenue and App Store revenue, KWAI video sharing application ranked at the second position in quarter two of 2019. This application is super hit in countries like India, Turkey, Brazil, Vietnam and Russia.

Kuaishou revenue

Kuaishou technology shared that its revenue in first half of 2020 shot up by around $3.8 billion and it gathered more than $5 billion revenue for the 2019 annual year. It also disclosed that with 302 million active daily users, Kuaishou technology became most popular video sharing platform in not merely in tier-1 cities – but also in rural areas of China. According to a report, Kuaishou revealed a huge library of 20 billion user created short videos. While 250 million people shared unique video content over the platform and registered a record sale of $176 million during a special holiday campaign. With this success, Kuaishou has set high goals for ecommerce transactions for the year 2021. For this goal, Kuaishou has joined hands with ecommerce platform – Taoboa, and Pinduoduao.

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