Author Wen Dan
Luo Zhenyu is going to ring the IPO.
On the evening of September 25, the official website of Shenzhen Stock Exchange disclosed that Beijing thought creation information technology Co., Ltd. (hereinafter referred to as “thinking creation”) formally submitted a prospectus and planned to be listed on the gem. The company plans to issue no more than 10 million shares and raise 1.037 billion yuan.
China’s official account of Luo Zhenyu’s founding was founded in 2014 by a former CCTV host. He started from a WeChat public account and seized the bonus of paying for knowledge online. He became the most famous and controversial network in China. After him, many well-known investment institutions, including Tencent, Sequoia, zhengxingu capital, Zhenge fund, Huaxing capital and China cultural industry investment fund, gathered.
Standing outside the IPO door, how much money does the knowledge payment business make? According to the prospectus, the company’s revenue will reach 628 million yuan in 2019, of which nearly 13 million yuan of tickets will be obtained only by the speech “Friends of time” in the new year’s speech, which is truly “knowledge rich”.
Luo Zhenyu, 47 years old
Eight years of entrepreneurship, making a knowledge payment business
Luo Zhenyu, known as “luopang”, is an unavoidable name in the peak era of knowledge payment.
Luo Zhenyu was born in Wuhu, Anhui Province in 1973. He graduated from Huazhong University of science and technology with a master’s degree from the Communication University of China. He worked as a producer of CCTV’s “economy and law” and “dialogue” in CCTV. He joined first finance and economics after leaving CCTV in 2008. After years of silence behind the scenes of CCTV, it is determined to turn to the stage. With the popularity of online video programs, it has embarked on the Internet and opened the chapter of knowledge talk show.
The official account of WeChat public launched in December 2012, provides users with free and lightweight knowledge services in the form of audio and articles, and recommends books and related derivatives. By March 2020, more than 12 million users have been focused on.
At the same time, there was also a video program “Luoji thinking”. The talk show “Luoji thinking” is broadcast weekly in the form of video. Each program is about 40-50 minutes, and the content is all inclusive. Luo Zhenyu uses a humorous interpretation to convey knowledge in simple terms to the public, and achieves an unexpected explosion.
Luo Zhenyu began to study the realization of fans after his official name and video content became the top we media. On August 9, 2013, luojisi launched paid members, which are priced at 200 yuan and 1200 yuan. In only 6 hours, 5000 family members and 500 hard core members were sold out, with an easy income of 1.6 million yuan.
In 2015, Luo Zhenyu team smelled new business opportunities. It is the first time for “cross domain innovation” in 2015. As of March 2020, 5 sessions of cross-year speeches have been held, with more than 40000 participants.
In May 2016, the app was officially launched. The voice of 60 seconds per day was lengthened to 10 minutes. Besides the free courses of individual brands, the paid courses of Xue Zhaofeng, Wu Jun, Xiong Yi and Wu Zhihong were launched. Instead of being a community or e-commerce, Luoji thinking has since evolved into a drainage port of a platform, opening up knowledge services.
In 2018, the opening of “get the University” has made a new breakthrough in Luoji thinking. From online knowledge service products to online and offline interactive physical universities, the educational attribute of Luoji thinking is becoming stronger and stronger. That is to say, from 2018, Luo Zhenyu’s “knowledge” business is in full swing.
The annual income is 600 million, and the income of cross year speech is more than 10 million
In the prospectus, the positioning of thinking creation is an enterprise engaged in “lifelong education” service. So, how much money does selling “knowledge” make?
At present, the business of thinking creation includes online and offline parts. The main line is “get” App, “WeChat’s official account”, offering courses, listening books and e-books. Offline activities include “get university”, “Friends of time” New Year speech, knowledge Spring Festival Gala, etc.
Judging from various business indicators, it is still in the growth stage. According to the prospectus, as of March 31, 2020, the monthly number of active users (MAU) of APP has exceeded 3.5 million, the cumulative number of activated users has exceeded 37.46 million, and the cumulative number of registered users has reached 21.35 million. With the increasingly rich online product matrix, the customer unit price of each paying user has increased from 203.81 yuan in 2017 to 231.93 yuan in 2019. More than 7000 students have been enrolled in the “off-line” universities in China, covering more than 11 times.
In terms of content, as of March 31, 2020, the number of online courses of the company has reached 319, nearly four times higher than that at the end of 2017. Among them, 2114 books are covered by listening to books every day; 31526 books are covered by e-books.
But in terms of revenue, although it is profitable, the downward trend is obvious. From 2017 to 2019, the company’s operating revenue was 556 million yuan, 738 million yuan and 628 million yuan respectively; the net profit in the same period was 61.3196 million yuan, 47.6441 million yuan and 115.054 million yuan. However, non net profit decreased year by year: after earning 49.9 million in 2017, it declined for two consecutive years, and decreased by nearly 40% in 2019 compared with two years ago.
In 2019, the revenue of online knowledge service business and e-commerce business of thinking creation decreased by 18.75% and 16.77% respectively year-on-year, and the income of offline knowledge service business increased by 56.94%. However, due to the low proportion of overall revenue, the overall revenue in 2019 decreased.
Online knowledge service business is the core business of thinking creation. In 2019, the total revenue of online knowledge service business, offline knowledge service business and e-commerce business accounted for 66.26%, 18.53% and 13.85% of operating revenue respectively.
The most famous offline knowledge service is the “Friends of time” cross year speech launched in 2015. As more and more people are familiar with this IP, its ticket price is also gradually rising. During the reporting period, the selling unit price of tickets for cross year speech exceeded 1000 yuan. In 2019, the number of participants and the average unit price of the cross year speech reached a high point, and the annual ticket flow was 12.8243 million yuan.
It is also mentioned in the prospectus that the gross profit rate of thinkings from January to March 2020 is 42.01%, which is slightly lower than the average level of comparable companies. Among the comparable companies, the gross profit rates of palm reading technology and Chinese online, which are mainly online knowledge service business, are 42.99% and 56.09% respectively, while the gross profit rates of China public education and entrepreneurship black horse mainly based on offline knowledge service business are 57.66% and 46.25%, respectively, which are higher than those of thinking creation.
Valuation of nearly 4 billion, Sequoia Zhenge, Tencent and other potential
Luo Pang’s fortune exceeds 1 billion
VC / PE is an important driving force in the process of thinking creation growing into a unicorn. Before that, the company has obtained five rounds of external financing. The investors include Tencent, Sequoia, zhengxingu capital, Zhenge fund, Huaxing capital, China cultural industry investment fund and many other well-known investment institutions.
The investment community has found that from 2013 to 2017, external capital has entered the mind creation every year. The investor of the first round of financing is Shunwei capital, and the investor of round a financing is Qiming venture capital. In October 2015, on the eve of the app’s launch, thinking creation announced that it was led by China cultural industry investment fund, old shareholder Qiming venture capital, as well as round B financing participated by Heyi group, whose predecessor was Youku potato, and Zhenge fund of Xu Xiaoping.
In 2016, thinking creation obtained financing from investors such as zhengxingu capital, Zhenge fund, new hope group, Meihua venture capital, etc., and its educational attribute became more and more prominent with the help of app. In 2017, thinking creation has started the business of teenagers and will play an increasingly important role in education. Sequoia, Tencent investment, Huaxing capital, hero entertainment and Huagai capital have also entered the market.
According to the prospectus, before the IPO, Luo Zhenyu, chairman of the board of thought creation, directly held 9.1061 million shares, accounting for 30.35%. In addition, jiehuanggang, an investment management partnership controlled by Luo Zhenyu, held 16.26% of the shares of the company, making it the second largest shareholder. Luo Zhenyu holds 41.66% of the company’s shares directly and indirectly.
According to the prospectus, assuming that the over allotment option is not exercised, the direct shareholding ratio of Luo Zhenyu will drop to 22.77% and the indirect shareholding ratio will drop to 8.48%. As a result, its total shareholding ratio will drop to about 31.25%. The company’s overall valuation is nearly 4 billion yuan. If the IPO goes smoothly, Luo Zhenyu’s fortune will be nearly 1.3 billion.
The third largest shareholder is Li Tiantian, director and general manager of the company, who holds 13.93% of the shares. Take off not to spend, Luo fat’s close comrade in arms, is Luo fat cut Hu over partner. Before he became the CEO of mind creation, tuobuhua was always praised as an enterprise consultant, and was also famous in the industry. From the 17-year-old debut to now, take off the resume is more beautiful than Luo fat.
In addition, a number of well-known investment institutions are on the list. For example, China cultural industry investment fund holds 7.5%, Sequoia holds 5.85%, Zhenge fund holds 1.9%, Liu Chuanzhi, Tian Suning, Yu Minhong, and other creators, such as Wang Jingbo, chairman and CEO of Noah fortune, and Yu Jianjun, co-founder of Himalayan FM, hold 5.23% of the shares. Li Xiaolai, who claims to be “the richest person in bitcoin in China”, is the second largest shareholder, jiehuang Gang investment partner list.
After three years of madness, the tide has subsided
“The first share of knowledge payment” is really coming
2016 is called “the first year of knowledge payment” by many people, and Luo Zhenyu is still the founder. In his speech on the new year’s Eve, he made knowledge payment quickly become a new industry, and in the second half of the year, he became a popular outlet.
With the development of knowledge payment, five knowledge giants, namely, Himalayan FM, get, Zhihu live, shell sub answer and Douban, have been born. Get and Himalaya FM main platform, Douban main vertical professional knowledge, sub answer and Zhihu live main instant on-site Knowledge Q & A.
After the outbreak in 2016, the crazy development in 2017 and the baptism in 2018, the unqualified knowledge vendors were gradually eliminated by the market, and the knowledge payment industry has gone through a small cycle. In addition to the audio platforms such as Himalaya and litchi, it is no doubt that the thought creation of the public listing plan and Wu Xiaobo’s Ba Jiuling are the ones who survived and the valuation developed rapidly.
The past boom is no longer, capital is also accelerating the escape. According to the data, there were 52 investment events in 2017, only 41 in 2018, and less than 10 Investments in 2019. Now it is difficult to see investors who stride into the knowledge payment industry.
A very realistic situation is that the knowledge payment industry is still faced with the problem of difficult realization. Although Luo Zhenyu’s thought creation is indeed profitable, a more anxious problem is in front of us. I’m afraid that the “knowledge track” where Luo Zhenyu is located can not support a grand story. Then, it is imminent to knock on the door of capital market.
Compared with Luo Zhenyu, Wu Xiaobo, a famous financial writer, contacted the capital market earlier, but failed. As early as the end of March 2019, Quantong education offered to purchase 96% equity of Ba Jiuling held by 19 shareholders, including Wu Xiaobo and Shao Bingbing, with the consideration of 1.5 billion yuan. After that, Quantong education stopped planning the acquisition, which lasted more than half a year.
In June of this year, the website of Zhejiang regulatory bureau of China Securities Regulatory Commission announced the public document of Hangzhou bajiuling cultural creativity Co., Ltd. According to the documents, Ba Jiuling signed a “counseling agreement” with the sponsor company, and the counseling period is roughly from June to November this year.
At present, the head players have been on the verge of listing to explore – Wu Xiaobo and Luo Zhenyu, who can win the “knowledge payment first share”? The answer seems to be getting clearer.