On the one hand, active users are growing at a high rate, but on the other hand, losses are increasing, how is stranger socialization going to find money?
Established six years ago, active users nearly doubled growth
Tianyecha App shows that Soul's affiliates for the Shanghai Random Door Technology Co, Ltd, which was established in June 2015, the registered capital of 10 million yuan, the legal representative of Zhang Lu, the scope of business contains multimedia field of technology development services; cultural and artistic exchanges planning; marketing planning; electronic products, daily necessities, and marketing planning. Marketing planning; electronic products, daily necessities sales and so on.
The prospectus shows that in 2019 and 2020, the number of monthly active users of the platform is 11.5 million and 20.8 million respectively, and the number of daily active users is 3.3 million and 5.9 million respectively. By this year, the above figures have nearly doubled. As of the first quarter of 2021, Soul had 33.2 million monthly active users and 9.1 million daily active users, representing year-over-year growth of 109 percent and 94.4 percent, respectively.
In terms of user stickiness, the percentage of Soul users who were active for more than 15 days per month amounted to 56.4% in March 2021. 78.4% of users who were active for more than 15 days in December 2020 maintained the same level of activity three months later. The average number of times an active user opens the app is 24 times per day, and the duration of use is 40-50 minutes.
Soul claims such user stickiness figures are the highest in the industry.
Jiang Han, an expert consultant for Upstream News, said that in today's growing singles economy, there is a big windfall for socializing with strangers in this lonely market, and Soul has its own advantage, which is that the majority of users are young, and among young users, girls are more likely to be users than boys. He said that because women are relatively more sensitive and like to talk, this is the key to the rise of Soul.
Valuation or 2 billion, Tencent "bet"
According to previous media reports, Soul proposed to raise 200 million U.S. dollars, valued at 2 billion U.S. dollars.
Soul as early as March 2017 and March 2018, completed by the five source capital (former Morning Star Capital), Yuan Sheng Capital and other institutions led by the A round and B round of financing. According to PitchBook, Soul has now raised a cumulative $60 million through private investors. The capital strength should not be underestimated.
From the point of view of the shareholding structure, the prospectus shows that Soul's shareholders include Tencent, DST Global's partners, 5Y Capital (previously known as Morningside Venture Capital) and Jiyuan Capital.Soul's financial advisors for the IPO include CICC, Morgan Stanley, Jefferies and Bank of America.
Previously, Tencent heavy "bet", not only funded $135 million to participate in Soul's 2020 D round of financing, on May 10 this year, and acquired 47,169,000 shares from Soul's other shareholders, at a cost of $442 million.
Currently, among the investor shareholders, Tencent has the highest shareholding of 49.9%, with 25.7% of the voting rights.CEO Zhang Lu still holds the voting rights in hand, holding 32% of the equity of Soul, with 65% of the voting rights.After the IPO, Zhang Lu and Tencent may become the biggest beneficiaries.
Losses intensify, stranger social money is not easy to earn
Soul is a social application called "do not look at the face only look at the soul of the" in Soul, the user uploaded all the data photos will be anonymized, the platform based on personality interests and other characteristics of the soul, the application of big data and artificial intelligence technology to push the most interesting for the user. The platform applies big data and artificial intelligence based on personality, interest and other characteristics of the soul to push the most interesting people and content for the users.
Because of its focus on chatting, Soul is very popular with teenagers.Soul mentions in its prospectus that the platform appeals to the younger generation, and in March 2021, 73.9 percent of its daily active user base was from the post-90s.
Currently, Soul's revenue sources are mainly value-added service fees and advertising revenues, with the average number of monthly paying users reaching 1.7 million in the first quarter of 2021, the average monthly user payment rate of 4.8%, and the average monthly income of paying users reaching $48.6 in the first quarter of this year. The prospectus shows that Soul's revenue will be 70.7 million yuan, 498 million yuan and 238 million yuan in the first quarter of 2019 to 2021, and the gross profit margin reached 86.2% in the first quarter of this year.
However, the money of stranger socialization is not easy to earn, Soul loss is further expanding. According to the prospectus, in 2019 and 2020, Soul will have a net loss of 300 million yuan and 488 million yuan, respectively. the net loss in the first quarter of 2021 was 383 million yuan, expanding by 624.7% compared with the same period last year.
Stranger social business, risk and cash difficult to solve
The same track of strangers and tan tan, also suffered from cash problems.
Stranger was founded in 2011, and tan tan was launched in 2014.On February 23, 2018, stranger announced the acquisition of tan tan.
In the fourth quarter of 2020, not measured in accordance with U.S. GAAP, Tan Tan's operating loss was $2.3 million (about $400,000), narrowing year-over-year. However, Tango's revenue was mainly derived from live streaming, which was a big hit in 2020, and its net revenue increased to 740.5 million yuan (about $113.5 million) from 369.8 million yuan in the fourth quarter of 2019, mainly due to an increase in net revenue from live streaming services.
Stranger, which has been listed for nearly seven years, has a share price of $14.03 today, a shrinkage of more than 70% from its 2018 share price peak of $48.766.
In addition to this, the industry is also facing regulatory risks.On June 28, 2019, the State Internet Information Office informed that it would work with the relevant departments and launch a special rectification action for the online audio chaos, and on the same day, Soul was taken off the shelves of the major app stores, and was not re-launched until August 28th. Stranger, Tan Tan, as well as Soul and even smaller volume Uki had experienced the downgrade storm.
Additionally, Stranger and Soul have all been exposed to vicious fraud cases typified by the "pig-killing disk".
Upstream News expert consultant Jiang Han analyzed, in the current stranger social market, there are two giants Stranger and Tan Tan, there are new products such as Hertz, Clarke is also in the constant division of Soul's territory, plus NetEase, Tencent, Baidu and other Internet makers and the launch of the Friends, HOOD, Hearth, Jaime, so much giant crowded on the track, Soul in the end there are a few points! It's hard to say.
Soul is not difficult to be listed from the socialization of strangers, but what to do after the listing is difficult.
Upstream News - Chongqing Business News reporter Wei Yue
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