Author丨Xie Xia
Editor丨He Yirong
Cover picture丨Tu Chong
was founded 9 years ago. Kuaishou’s “Buddhist system” is at the forefront. In the early stage, it relied on endogenous growth to shine, thus reaping the rewards. Favored by giants.
However, the growth of any enterprise will encounter bottlenecks. Enterprise development must go through four life cycles: the initial period, the growth period, the maturity period and the decline period. This movement trajectory is called the "first curve". If an enterprise wants to continue to grow, To avoid decline, it is necessary to open up a second growth path, the "second curve", before the peak of the first curve is reached.
Without the second curve, Kuaishou’s valuation would have less room for imagination. To go further and continue to grow in valuation, Kuaishou needs to explore more possibilities with investment.
Kuaishou’s investment is not as generous as giants like BAT, nor is it high-frequency and precise like ByteDance and Meituan. Compared with investment institutions, it does not have the courage to spend huge sums of money. Compared with unicorns of the same level, its investment The layout starts late, the amount is small, the quantity is small, and it does not follow the trend. Therefore, it rarely invests in star projects, and even many invested companies cannot be named.
Looking at Kuaishou’s investment cases, half of them are angel rounds, Series A and Series B, one-third are mergers and acquisitions, and there are three cases of Series D and above. The investment fields cover games/e-sports, education, artificial intelligence, VR/AR/ MR, entertainment and content ecology, short video, e-commerce services, payment, etc.
Kuaishou investment chart, compiled from public information/Chart created by Chuangye Bang
Through investment and mergers and acquisitions, Kuaishou has deployed in 10 fields. The prospectus shows that Kuaishou has made more than 40 investments, including 112 million yuan in an MCN institution, 90 million yuan in a company that designs and develops chips, 10 million yuan in content community applications, and 40 million yuan in online music and dance game developers. wait. The prospectus of
also disclosed two upcoming acquisitions, one of which is engaged in video and shooting tool social media, and the other is an online payment service company. The latter is most likely to be the Yilian Pay reported a few days ago.
Kuaishou has made three rounds of D+ and above investments, including the D+ round of Spark Thinking, the E round of Minglue Technology, and the ZhihuF round. From these three investments, we can see that their strategic significance is greater than the actual financial return.
The Kuaishou investment map has begun to take shape and still needs to be filled in.
Gao Zhu short video ecological wall
has a similar investment style to ByteDance, and Kuaishou also tends to invest in or acquire early-stage entrepreneurial projects.
However, the two founders of Kuaishou Su Hua and Cheng Yixiao have devoted more energy to products, and their investment courage is inferior to that of ByteDance founder Zhang Yiming . Therefore, Kuaishou has not yet formed the investment capabilities that can bring together the world. . A closer look at Kuaishou's investment landscape shows that Kuaishou pays more attention to the strategic significance of investment rather than financial returns, betting on future technologies, and therefore temporarily lacks the momentum for systematic collaborative operations.
Putting aside factors such as capital and strategy, investing in early-stage entrepreneurial projects may also be related to the entrepreneurial experience of Kuaishou CEO Su Hua - he himself has three entrepreneurial experiences and has profound observation and understanding of entrepreneurs and entrepreneurial projects.
In Kuaishou’s investment cases, half of the projects were before Series B. Through investment, Kuaishou has been able to extend its exploration into the short video and live broadcast ecology, and take the lead in terminal and overseas markets.
Kuaishou has invested in two smart device teams. One is TONOT, a developer of smart glasses , which focuses on "a pair of glasses that can shoot videos." The founder Wang Zhongfei was previously the co-founder and CTO of Faceu & Faceu.At present, TONOT has launched joint smart glasses with Line Friends and Tencent Weishi respectively. This product has photo and video functions superimposed on sunglasses, which can record the first-person perspective.
Another smart device developer invested by Kuaishou is Nreal. Nreal's smart devices mainly include MR (mixed reality) smart glasses, and its flagship product is Nreal Light.
Nreal founder and CEO Xu Chi once put forward this point of view in previous interviews: Compared with mobile phones, glasses are closer to the human eye. They may be the last screen that humans need, and they are also a new way of interaction that can be human-centered. .
Nreal Light mixed reality glasses/Source Nreal official website
Nreal Light mixed reality glasses not only support shooting, but also have functions such as movie viewing, gaming, social networking, and shopping, and support mobile phones such as Samsung Galaxy Note 20 Ultra 5G and Sony XPERIA 5 II, as well as in the future Other devices that support 5G. Entrepreneurship Network learned that Nreal has jointly held a press conference with Japanese operator KDDI and will officially launch Nreal Light in Japan in December. In addition, South Korea has also begun selling it in various LG U+ retail channels.
4G gives wings to the short video platform. What are the opportunities for 5G and further communication technologies to be born? This is what Kuaishou needs to think about. Every underlying technological change will give birth to new scenarios and platforms. AR may be one of the core scenarios under 5G. With the acceleration of global 5G, AR glasses will also break the boundaries of space and physics, allowing users to be proportionate to their size. Stars, scenic spots and other virtual images can interact with each other, thereby bringing immersive experience and disruptive interaction paradigms, better connecting people and technology, and thus defining the next decade.
At least from these two investments, it can be seen that as a company driven by product technology, Kuaishou pays more attention to the layout of structural and ecological technological changes. Through long-term investment in technology, it can obtain the key to open the door to future changes. , continue to expand their territory.
smart hardware is cool, but also painful. However, the objects of these two investments are in line with Kuaishou CEO Su Hua’s philosophy: starting a business should solve unknown problems, solve social problems, and avoid the products of predecessors. “Do things that predecessors are not willing to do, but it is very hard.” matter".
The biggest advantage of smart glasses that integrate multiple functions is to free your hands, and this mobile terminal screen naturally complements Kuaishou’s usage scenarios in short videos and live broadcasts, and has a certain space for imagination in the future.
Kuaishou led the Pre-A round of blockbuster APP. Its founder Chen Man was Fan Bingbing’s photographer. This app has many professional video editing functions, allowing users to create and share videos. Previously, Wang Rui, head of Kuaishou Investment, said that the Blockbuster APP allows ordinary users to easily create "blockbusters" and share their records and expressions with friends and like-minded people.
Blockbuster APP is indeed closely related to Kuaishou’s business, but Kuaishou also has its own video editing tool Kuaiying. In addition, ByteDance’s Jianying also has a huge user base. Faced with being surrounded by products such as Kuaiying and Jianying, whether Blockbuster APP With other differentiated competitive advantages, how to break through is still a mystery.
In addition, Kuaishou also acquired Owlii to obtain 3D holographic dynamic imaging technology . Owlii has "holographic transmission-three-dimensional character reconstruction and transmission technology", which can achieve real-time interaction through mobile phone AR. Founder Wen Ziyu once revealed that currently only , Microsoft and Owlii have achieved real-time image transmission.
Picture taken from Owlii official website
After acquiring Owlii, we have not yet seen new technology demonstrations, but Kuaishou has launched short video application Zynn in overseas markets through Owlii.
Zynn is similar in interface to Douyin overseas version of TikTok. The biggest difference between the two is the different means of acquiring users. Zynn has copied the model of the domestic Kuaishou Express version, earning cash by inviting friends and watching short videos to attract new users with red envelopes. . Using this model, Zynn once surpassed TikTok and topped the list of downloads in the US APP Store shortly after its launch.
However, the red envelope model also has potential risks. In early June this year, media reported that Zynn could no longer be downloaded from Google Play.
Zynn is not Kuaishou’s first product to enter the overseas market. Three years ago, Kuaishou launched the overseas version of the short video application Kwai, which was launched in many Asian countries. At first, Kwai rose quickly in major rankings and once occupied the top spot, but it has not yet The ability to replicate the miracle of domestic “natural growth” has gradually faded out of sight.
With the above four investments, Kuaishou’s integrated software and hardware moat has begun to be drawn, but the blueprint is still unknown. However, in terms of overseas business, the pressure on Kuaishou is not small. On the one hand, domestic players are successively competing overseas, and on the other hand, giants such as Facebook and Youtube have also joined the game, adding variables to the overseas battle. Next, Kuaishou will also There are tough battles to be fought.
Kuaishou games emerging from hidden corners
In the past three years, Kuaishou’s net losses have continued to expand. In the first half of this year, the net loss reached 6.348 billion yuan, a year-on-year increase of 425%. Continuous losses will restrict Kuaishou's progress. It needs to regain blood. It can get a short respite by entering the capital market, but external financing alone is not enough.
has huge traffic. How does Kuaishou monetize it? The first choice is naturally games. Games can bring more users to Kuaishou, and more importantly, through games, Kuaishou can deeply explore the user value of the platform.
Any traffic giant will not miss this cash cow. BAT appears in all aspects of game development, distribution, channels, etc. ByteDance is also among them. Companies like Meituan and Didi have also developed game businesses. In the third quarter of this year, Tencent's game revenue was 41.4 billion yuan, NetEase's game revenue was 13.8 billion yuan, and the current hit game "Genshin Impact" had global sales of 100 million yuan in a single day.
In the field of games, Kuaishou does not have much experience. According to the prospectus, live broadcast and online marketing services account for more than 95% of Kuaishou’s revenue, while other business revenue only accounts for 3.2%. Other businesses include e-commerce business, Internet Games and other value-added services. means that Kuaishou’s game business has huge room for improvement and is likely to become the next growth engine.
Currently, Kuaishou has invested in and acquired 7 game companies, including Liangwu Games, Cross Star Studio, Ceres Motion, CMGE China Mobile Games, Ace Interactive Entertainment, YTG and Hero Sports VSPN, involving game development and distribution. , e-sports event operations, e-sports clubs, etc.
Liangwu Games is an independent game team. The previously launched " Vitality Knight " has a good reputation, and it recently launched "War Soul Mingren". AcFun's game developer Ceresdo, acquired by Kuaishou, has launched web games such as "Ao Tianxia" and "Awarding the World".
Kuaishou’s Ace Interactive Entertainment, which entered the Angel round, has launched the game "Return of the Hero". Its chairman and CEO is Liu Zhijun. He previously founded upstream network. In 2013, it was acquired by Zhangqu Technology with a valuation of 1.3 billion yuan. The game "Tower Defense Three Kingdoms" has over 100 million registered users and a cumulative revenue of more than 2 billion.
data shows that Ace Interactive Entertainment focuses on Europe, North America, Hong Kong, Macao, Taiwan, Japan and South Korea, and some of its game products have been successfully launched in Europe, the United States, Japan, South Korea and other countries. The product sales exceeded 100 million in three months of product promotion, and the products are on the global best-selling list ( Apple/Google store) ranked in the top 50.
Cross Star Studio's business covers animation and game business. Animation works include "Innocent City" and "Outlander Authority", and game works include "Vitality Idol Season", "The Tenth Domain", "Spiral Realm Line" and " Spiral". Waltz ".
Kuaishou has not only invested in game companies, but has also entered the gaming industry, but has been hiding in a hidden corner . According to Jinghe reports, Kuaishou's self-developed games include multiple studios such as Anno, Ark, and Kuaiyou. Three years ago, Kuaishou began to develop a mobile game called "Sky Island Genesis". On June 12 this year , this game underwent a paid deletion test, but the player payment data was seriously lower than expected, resulting in "almost all the project team's research and development team being laid off."
At present, the Kuaishou game business is gradually emerging. Self-developed games have been launched online, including " Zhenhun Street : Martial God Body", "Aiyou Landlord", etc. The publisher of "Zhenhun Street: Martial God Body" is Muyuan Technology . In April 2019, industrial and commercial change information showed that Kuaishou fully acquired Muyuan Technology, which once operated a picture social app called Xiantou.
Kuaishou App Game Center screenshot
Chuangye Bang learned that Muyuan Technology has self-developed and distributed more than ten game products. In September this year, it won the exclusive agency operation rights of "Three Kingdoms Unparalleled" from Caesar Culture. Earlier, Previously, Muyuan Technology also launched a game called "Magic Kitchen". After Kuaishou acquired it, it launched the Kuaishou Small Theater "Chasing Duck" App, which focuses on short video series.
From a commercial perspective, games are a means for Kuaishou to monetize. From a social perspective, games are also a channel for Kuaishou to connect with users. When "Lao Tie" becomes a cultural phenomenon, Kuaishou's game layout connects private domain traffic depressions and becomes an extension of "Lao Tie"'s social relations and platform culture.
Dream Esports Circle
short videos and live broadcasts have built a natural foundation for Kuaishou, and esports buildings can rise from the ground.
As of the end of May this year, the monthly active users of Kuaishou game live broadcasts exceeded 220 million, and the monthly active users of short game videos exceeded 300 million. There are over 1.6 million monthly active game anchors, including 12 game anchors with over 10 million fans, and over 9 million monthly active short video creators.
Kuaishou Game Live Broadcast and Game Short Video Monthly Active Users/Image Source Kuaishou Official
The relevant person in charge of Kuaishou Game publicly stated that the Kuaishou Game Association has the highest comprehensive share ratio among first-line platforms, and will spend 5 billion in funds and 100 billion in traffic to support games in the future. Content creation, and plans to work with hundreds of universities to help cultivate e-sports talents and create an open and win-win game e-sports ecosystem.
In the field of e-sports, almost all of Kuaishou’s opponents are from Tencent. For example, Douyu, Huya, Bilibili, and Penguin Esports all have Tencent behind them, and Hero Sports is also a Tencent-owned company. Of course, Tencent is also Kuaishou’s largest institutional shareholder.
In the third quarter of this year, Douyu’s mobile monthly active users reached 59.6 million, Huya’s mobile monthly active users were 74.2 million, and Bilibili’s overall mobile monthly active users reached 184 million. In comparison, Kuaishou maintains a greater advantage in monthly active users. .
However, Kuaishou entered the e-sports field later than others. Douyu, Huya, and Bilibili have accumulated many years of experience in e-sports copyrights, own e-sports events, and e-sports teams. Bilibili has previously cooperated with Riot Games reached a strategic cooperation for the "League of Legends" global event and obtained the exclusive copyright for the live broadcast platform in mainland China for three consecutive years from S10 to S12. Station B distributed this copyright to Huya, Douyu and Penguin Esports, but Kuaishou was not among them. List.
According to Gamma statistics, nearly 60% of mobile game users use short video platforms as the main channel to obtain game information.
Kuaishou’s advantage lies in the mobile terminal. At the beginning of this year, Kuaishou has won the live broadcast rights of the " King of Glory " professional event.
In July this year, Kuaishou announced a contract: all PEL teams will be stationed in Kuaishou game live broadcasts. Since then, well-known e-sports anchors such as PDD, Weishen , and Da Sima have successively entered Kuaishou.
It wasn’t until August, when Kuaishou acquired YTG Esports Club and changed its name to KS.YTG Esports Club that it was no longer just a spectator of esports. Winning the event ticket and entering the Honor of Kings KPL professional league, Kuaishou won a place among the only 16 seats in KPL.
Image source Kuaishou official
As the highest-level professional league of Honor of Kings, the average daily viewing volume of the KPL 2020 Spring Split has increased by more than 50% month-on-month. The viewing volume of the World Championship Finals has reached 570 million people. The sponsor lineup covers 3C, automobiles, FMCG, E-commerce and other industries have abundant commercial space. It is foreseeable that as Kuaishou increases its focus on e-sports, traffic and capital will follow.
However, in the KPL 2020 Autumn Split, KS.YTG did not have enough winning points and missed the 2020 KPL Autumn Split playoffs and Winter Champions Cup.
Kuaishou is also conducting e-sports layout offline, investing in Hero Sports VSPN to improve the content ecological closed loop of game e-sports.
Hero Sports VSPN has the absolute say in the field of e-sports events. It not only hosts Tencent Honor of Kings, Peace Elite, Cross Fire , PUBG, League of Legends, QQ Speed Mobile Games, Clash Royale and many other events, but also competes with 70% of domestic competitions. We have reached in-depth cooperation with 50% of the top overseas e-sports events, hosting more than 10,000 professional e-sports events, and producing and broadcasting a total of 12,000 hours of video content every year.
In addition, Kuaishou also managed AcFun, game live streaming, and self-developed games under the same game team to further improve its organizational structure.
AI drives everything
Kuaishou is on the road to high speed, exploring opportunities in more subdivided fields. Games and e-sports are typical examples, while education, artificial intelligence, and e-commerce are also the focus of Kuaishou's bets.
In July last year, Kuaishou launched the “Education Ecological Partner Program” to provide “tens of billions of exposure” traffic support and operational guidance to selected accounts. In November, Kuaishou allocated 6.66 billion education traffic to subsidize education accounts. Educational institutions such as GSX and Yuanfudao have already settled in Kuaishou.
Behind the series of actions, it emerged that Kuaishou not only assumed the identity of a channel, but also began to build an education platform.
In the field of education, Kuaishou has invested in Precision Learning and Spark Thinking respectively.
Accurate Learning is an adaptive learning platform that applies artificial intelligence and big data technology to the field of K12 education. Its core products include accurate question setting and accurate omission detection and filling.
Kuaishou CEO Su Hua said about the investment, "When short videos collide with education, what kind of help can it bring to children in third- and fourth-tier cities and below who are striving to grow up? How to make educational resources equitable and systematize courses, Providing a better user experience has always been a proposition that I have been thinking about and exploring."
Spark Thinking offline billboard/Source: Chuangye.com Photographed by Xie Xia
Spark Thinking focuses on mathematical thinking courses for children aged 3-12 years old. The mathematical thinking track has been favored by capital since 2018.
Spark Thinking founder Luo Jian previously revealed in a letter to all employees that Spark Thinking has more than 85,000 students taking classes every day, more than 250,000 current students, 6,500+ employees, an 85% referral rate, and a higher education rate in July this year. Up to 95%.
Picture source "2019 Kuaishou Education Ecology Report"
"2019 Kuaishou Education Ecology Report" shows that from June 2018 to August 2019, the proportion of users in lower-tier cities in lower-tier cities was 9.2% higher than the industry average. means that Kuaishou can bring technology, traffic, and imagination space to sink into the market for the two education companies it has invested in.
In the field of e-commerce, Kuaishou invested in Magic Chopsticks Technology in early 2018. This became a turning point for both parties and an important step for Kuaishou's investment to promote strategic development.
Picture taken from the official website of Magic Chopsticks Technology
Kuaishou did not have strong e-commerce service capabilities at first. After investing in Magic Chopsticks Technology, Magic Chopsticks became the first batch of SaaS service providers to access Kuaishou e-commerce, making up for Kuaishou's e-commerce field. shortcomings.
Magic Chopsticks Technology revealed to Chuangye.com that Magic Chopsticks used to play horizontally, using one product to cover all industries. After Kuaishou Investment entered, Magic Chopsticks Technology has undergone great changes. It has begun to firmly play vertically and focus on Internet celebrity e-commerce. The business ecosystem provides SaaS trading tools for Internet celebrity groups and provides participants with a complete trading system and service guarantee.
From a technology-led company to today's supply chain services, Internet celebrity operations, customer service services, etc., Magic Chopsticks has become a comprehensive ecological service provider and has developed an S2B2C business model. Its main service targets are mid-range Internet celebrities. , with more than one million registered internet celebrities. Internet celebrities can use the "Magic Chopsticks Star Selection Merchant Version APP" to put products on the store shelves with one click and complete the entire closed transaction loop within Kuaishou. Currently, Magic Chopsticks is authorized by Tencent to operate the "Penguin Shop" and is also connected to platforms such as Weishi and National Karaoke.
In 2018, Kuaishou began to comprehensively promote its e-commerce business. The prospectus disclosed that the e-commerce transaction volume in 2018 and 2019 was 96.6 million yuan and 59.6 billion yuan respectively. In the first half of this year, the total e-commerce transaction volume on the Kuaishou platform has reached 109.6 billion yuan. . e-commerce has become the second growth pole of Kuaishou. It can also be seen from these figures that the cooperation between the two parties has been quite effective. .
In the field of artificial intelligence, Kuaishou has five investments, including Mininglamp Technology, Zhiyi Technology, Zhoutong Technology, First-Class Technology and Xiaomao Technology, involving big data, AI deep learning, AI clothing e-commerce, AI applications, and AI images respectively. Waiting for business.
Among them, Mininglamp Technology has completed the E-round financing. It has many implementation cases in multiple industries in the fields of data middle platform, cognitive intelligence technology, and natural language processing technology applications.
In June this year, Kuaishou also signed a project with Ulanqab City, investing 10 billion yuan to build a local data center and deploying about 300,000 servers, mainly used for big data and AI training. The scale ranks among the domestic data center hardware Reserve the second echelon. The technical value behind
AI is the underlying strength of Kuaishou China Unicom in the future. Through AI layout, it may be possible to connect various businesses of Kuaishou, drive the formation of the entire Kuaishou ecological structure, and have data support to operate at high speed and precision.
The strategic synergy of investment
The purpose of mergers and acquisitions can be divided into two types, namely financial mergers and acquisitions and strategic mergers and acquisitions. The former emphasizes "value", while the latter emphasizes "potential". "Value" is the monetary value that the acquired company can generate, while "potential" brings the energy of chemical reactions between the acquiring and acquiring parties.
Financial mergers and acquisitions do not need to consider strategy, but in strategic mergers and acquisitions, finance is extremely important, because it not only involves the integration of the assets of two companies, but also bears the risks brought by the comprehensive reorganization of culture, business, personnel, resources and management. , which means that the smaller the acquired company, the less difficult it is to integrate, the simpler the relationship between individuals and organizations, and the less effort and cost involved in mergers and acquisitions.
Judging from the mergers and acquisitions that have occurred, Kuaishou is mostly strategic mergers and acquisitions. In addition to the above-mentioned mergers and acquisitions in the fields of games, AR/MR, and entertainment content, the most important merger and acquisition of Kuaishou is undoubtedly AcFun (Station A), which assumes the important channel for Kuaishou to extend from short videos.
As China’s first video barrage website, AcFun has a large number of two-dimensional users. It is a long-term competitor with the listed Bilibili (also known as Bilibili or Bilibili). Kuaishou acquired AcFun in June 2018, which is Kuaishou’s layout in the long video and two-dimensional fields. After the acquisition, Station A maintained an independent team and independent operation. One year later, Kuaishou announced the organizational structure adjustment of Station A. Wen Min, the former deputy general manager of NetEase’s Literature and Comics Division, served as the CEO of Station A, and the original CEO Liu Yanyan resigned.
Wen Min once revealed in an interview that the bottom layer of the two communities of Kuaishou and Station A involves content production and content consumption, and there will be community and social elements. The cognition and understanding of the underlying logic of these products are the same. Kuaishou’s understanding of the community and people at the bottom level is the key to the two products coming together.
is empowered by Kuaishou. Station A, which has been down several times, has received strong data and technical support, so that it can move forward more steadily.
Kuaishou also acquired Yiwuwu, an online multi-person collaborative document editing tool. The actual time of the acquisition should have occurred in 2018. Not much information about this product has been exposed after the acquisition, or it may be used internally by Kuaishou. Some media pointed out that it has been placed under the company's efficiency engineering department.
Not long ago, Kuaishou completed the acquisition of Yilian Payment and indirectly obtained a payment license, opening a door for Kuaishou's financial business.
M&A is a means rather than an end. It requires mutual empowerment to ultimately produce a chemical reaction of 1+1>2. Kuaishou also has an investment of extremely important strategic significance: Zhihu.
Kuaishou led Zhihu’s Series F investment in August 2019. This investment seems normal, but there is a question behind it, that is, why does a Series F company need to take money from another Series F company? It is speculated that there will be further strategic cooperation between the two parties.
“To establish a new order in competition, we need to remain open and empower each other.” Zhihu founder Zhou Yuan revealed on Zhihu that in 2018, he attended a meeting with Su Hua, and during the meeting, he discovered that Su Hua was using a trumpet to browse Zhihu , and Zhou Yuan used the trumpet to play Kuaishou frequently, and the two looked at each other and smiled. In June 2019, we had lunch for lunch and it took about an hour to finalize the cooperation.
Recently, it is popular to say that "investment is a friend of time". Kuaishou, which has removed the "Buddhist" label, walked out of the Tower of Babel and rushed onto the road of capital. It is full of horsepower. It has abundant brain power, physical strength and energy, but the landscape is changing rapidly. , what ultimately matters is endurance and synergy. Only by maintaining your own pace of innovation with the help of investment can you have a broader imagination in the future of business.
Disclaimer: The information or opinions expressed in this article do not constitute investment advice to anyone under any circumstances.
