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Wen / Wang gangge, LV Yue
Source: capital detective (ID: deep_ insights）
On the evening of June 16, Beijing time, bluecity Holdings Ltd., the parent company of blued in LGBTQ community, formally submitted a prospectus to the securities and Exchange Commission. The listing place is Nasdaq, the stock code is “BLCT”, and it is expected to raise 50 million US dollars.
LGBTQ refers to the general designation of lesbian, gay, bisexual, transgender, queer and other sexual minorities. According to statistics, as of December 31, 2018, the number of LGBTQ groups in the world exceeded 450 million, and the number of LGBTQ groups in Asia was about 300 million.
In March, Zhou Yahui of Kunlun world wide sold Grindr, the world’s largest gay social network. This makes “who is the world’s first gay social stock?” The answer was announced ahead of time.
Now, blued is no doubt at the top of the list when it turns in its prospectus.
Past life, present life
Blued, the predecessor of the pale blue network, has experienced seven rounds of financing and 20 years of suffering. It is the absolute monopolist in the field of gay social communication in China.
In 2000, Geng Le, 23, founded a gay website called “light blue memories”. At that time, not many people in China knew about “gay”, and different sexual orientation from most people was equivalent to a “disease”.
The existence of the Internet has given Geng Le a place to express his feelings, and the light blue network has gradually changed from its own small space to a group’s spiritual home.
In 2006, Geng le and several friends he met through the Internet formed a team to manage the website. The funds came from the donations of netizens and Geng Le’s own wallet. In addition to the lack of money, the more sad thing is that the pale blue network because the reported servers are shut down two or three times a year, Geng Le’s team has to “guerrilla warfare” in many cities like illegal organizations.
Geng Le, founder and CEO of blued
And Geng Le’s real professional identity is not in line with the sideline that needs to avoid reporting.
He graduated from the police school at the age of 19. At the age of 26, he had been promoted to the position of deputy director and enjoyed the treatment of deputy section level. Because of this difference, Geng Le’s friends who work in Sohu are quite interested in his experience, so they helped him make a documentary. But the documentary soon let everyone know what he was doing. Geng Le couldn’t run the website as a policeman any more.
In 2012, he resolutely threw away the iron rice bowl and began to officially enter the business.
Even if he wants to leave his hometown and face the resentment of finger pointing and relatives, Geng Le himself regards the moment of resignation as the moment of “freedom without mask”. In this year, light blue also ushered in the first turning point – Geng Le, as one of the individuals and institutions with outstanding contributions to AIDS prevention and control, was received by the leaders.
The first to cut into the field of AIDS prevention and control was the idea of Geng Le because his friends were infected with AIDS. Later, it became the most important factor for pale blue network to have legitimacy and maintain its first mover advantage for many years.
After that “interview”, blued, a product from the web end to the mobile end, was founded and successfully obtained multiple rounds of financing in the next few years. According to the prospectus, Lancheng brothers media holds 37% (the shareholder is the management of Lancheng Brothers), Shunwei capital holds 12.3%, CDH investment holds 9.4%, Tianze Jinniu holds 7.6%, Qingliu capital holds 5.7%, Xincheng capital holds 5.1% and Jiayu capital holds 4.4%.
Along the way, blued can be said to be “through the cycle”. On the one hand, zank and other similar products gradually fell down, on the other hand, under the dynamic change of policy, blued has always survived smoothly.
In 2016, with the opening of mobile live broadcast, the commercialization of blued entered a smooth period, and at that time, it had achieved profitability. At present, from the perspective of blued’s business, live entertainment, member services, health services and assisted reproduction constitute four major cash flow sectors.
At the same time, blued is no longer just a social app in Geng Le’s eyes. He positioned it as a “global gay ecotype company” and expanded the coverage area to the whole Asian region. He said confidently that “we should eat all the countries and regions in Asia and become the local No.1”.
From the data point of view, blued is indeed approaching the goal of “taking Asia as a whole” step by step in recent years. From the year before last, blued went out of Asia to Latin America.
Annual revenue of 759 million yuan mainly depends on live broadcast
The story sounds good. What about the actual business data?
According to the prospectus, in terms of revenue, blued’s operating revenue in 2019 reached 759 million yuan, a year-on-year increase of 51.4% compared with 510 million yuan in 2018. In the first quarter of 2020, the revenue reached 207 million yuan, compared with 145 million yuan in the same period of 2019.
In terms of profit, its net loss in 2018 and 2019 was 90.2 million yuan and 52.9 million yuan, with a net loss rate of 18% and 7% respectively. In the first quarter of 2020, the adjusted net loss of the company further narrowed to 7.6 million yuan, with a net loss rate of only 3.7%. That is to say, blued is still not profitable, but its loss rate has been narrowing.
At the business level, live service is blued’s first revenue source. In January 2016, blued first launched the mobile live broadcast function in China, setting off a boom of same-sex live broadcast in China. The same-sex social apps, including zank, Aloha, Ledo, etc., have also successively launched live broadcast functions. For a while, the market competition of LGBTQ live broadcast has entered a white hot stage.
According to the prospectus, the live broadcast revenue in 2018 and 2019 was 460 million yuan and 670 million yuan respectively, accounting for 91.3% and 88.5% of the total revenue respectively. At the user level, blued’s paid users for live service increased from about 137000 in the first quarter of 2019 to 178000 in the first quarter of 2020.
In addition to live broadcasting, blued’s revenue sources include members, advertising and others.
In the first quarter of 2019, blued began to provide users with pay per view services. Blued’s member service revenue increased from 3.06 million in the first quarter of 2019 to 15.013 million in the first quarter of 2020, an increase of 390.6%.
In advertising, blued increased from 4.947 million yuan in the first quarter of 2019 to 5.596 million yuan in the first quarter of 2020, a year-on-year increase of 13.1%.
Other sectors accounted for a relatively small proportion, including sales and services related to health and family planning. Their revenue increased from 1.094 million yuan in the first quarter of 2019 to 7.221 million yuan in the first quarter of 2020, an increase of 560.1%.
Photo source prospectus
According to Frost & Sullivan’s report, blued has become the largest online LGBTQ community in India, South Korea, Thailand and Vietnam based on the average Mau in 2019.
Photo source prospectus
Standing at the entrance of the gold mine, the value of blued is self-evident.
According to Sullivan’s statistics and analysis, the Mau of the global LGBTQ group on online social platforms has increased from 350 million in 2014 to 620 million in 2018, with a compound annual growth rate of 15.1%. It is expected that the compound annual growth rate from 2018 to 2023 will be 10.8%.
The Mau of LGBTQ online social platform in Greater China increased from 78.9 million in 2014 to 200 million in 2018, with a compound annual growth rate of 25.7%. It is expected to reach 410 million people by 2023, with a CAGR of 15.6% from 2018 to 2023.
The average disposable income of LGBTQ population is generally higher than that of the general population. According to consumption expenditure and marketing expenditure, the global LGBTQ market size in 2018 is US $3.9 trillion, which is expected to reach US $5.4 trillion by 2023, with a compound annual growth rate of 7.0%.
Global LGBTQ online social platform market size is calculated by monthly active users (MAU), 2014-2023 forecast source: Sullivan Report
However, although standing at the entrance of the gold mine, its business income structure is too dependent on live broadcast, the crowd value is not fully shown in terms of advertising realization, and the global policy risk cannot be ignored Many concerns make blued unable to “lie down and win”.
At this moment, the turbulence of the US stock market and the trust crisis of China capital stock in the overseas market further increase the risks and challenges of IPO in the US. This year, there has been an absolute decline in the number of companies that have rushed to IPO in the new economy.
Whether blued can win the title of “the first share” smoothly still needs multiple blessing of strength, market and destiny.
(statement: This article only represents the author’s point of view, not Sina’s point of view.)