Live from China, it’s the Apps Show

Ever heard of Kuaishou? It’s a fast growing social media app in China, and it just received a $350 million investment led by Tencent.

Initially started as a picture sharing app, Kuaishou had reached a user base of 400 million. But then the company decided to pivot to video and live broadcasting — the most attractive category in social media — and is now attracting an impressive 50 million daily active users, with 5 million videos being uploaded every day.

What is interesting is that the majority of users are from China’s lower tier cities and rural areas. This is partly because of the viral spread of Jackass-type of clips that drove the initial interest to the app. Users are filming self-injuring pranks ranging from eating strange things, drinking too much alcohol, jumping into icy rivers, or putting fireworks in one’s own crotch… Hence, the app grew a stronger audience in rural China.


But that’s changing. With 50 million daily active users, and presumably growing fast, Kuaishou has certainly moved to the big league of social media players. As a comparison — Twitter, while at 319 million monthly active users, has about a third of them using the service on a daily basis. Hence, 5-year old Kuaishou is already about half the size of Twitter.

The new financing is rumored to have valued Kuaishou at $3 billion, but the numbers are not confirmed. Earlier investor include Baidu, Sequoia, and DCM. Kuaishou is also expected to do an IPO later this year, coming off the heels of Meitu which raised $630 million in its Hong Kong three months ago.

Meitu is essentially the Chinese Instagram copycat, with 456 million monthly active users. The stock has skyrocketed +82% since its debut, and is now valued at $8.5 billion. Analysts expect Meitu to report $220M in revenue for 2016 (it had reported $88M for the first 6 months). This would imply 38x P/S.

Source: Yahoo Finance

The video and self-broadcasting aspect of social media is booming. It is the major catalyst for engagement and growth, and everyone is shifting focus towards that. Meerkat and Periscope were the to pioneers, but due to lack of quality and lack of execution, both apps faded.

Snapchat created its own version of broadcasting with Stories. The service proved to be golden and catapulted user growth, engagement, and Snap’s overall value. Facebookmade numerous attempts to copy that success, and was only successful to do so on Instagram.

We are keeping Kuaishou high on our radar.

As published in this week’s A 2 Apple:

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