Zhihu listing: a bumpy commercialization and a late IPO


Source: Beijing Business Daily
Original title: Zhihu IPO: bumpy commercialization and late IPO
In the last month of 2020, there are a lot of low-key news about Zhihu. It first passed its 10th birthday, and then it was revealed on December 23 that it was writing an IPO report and listing application. As of the press release of Beijing business daily, Zhihu’s relevant people have not responded yet, and people in the industry are not surprised by Zhihu’s listing. Most of the Internet industries are listed after five years of establishment, and Zhihu is a rare Internet “wave” that has not been listed at the age of 10.
In terms of the investor’s background, Zhihu, who has been invested by Tencent and Baidu, is the favorite of the giants. Its valuation is higher than that of its overseas counterparts. However, in terms of commercial exploration, Zhihu has not much to be worth mentioning. After lowering the registration threshold and attracting users, it is difficult to define a label. For ordinary users and observers, listing is a window to see Zhihu from a close distance. For Zhihu, giants will not give up building their own content ecology. How to ensure healthy content and commercialization report card is a good question for Zhihu to answer.
Why IPO is slow
On December 23, it was reported that “Zhihu is writing an IPO report and listing application. At present, three underwriters, Goldman Sachs, Morgan Stanley and Credit Suisse, have been identified. The listing location may be in Hong Kong stocks or US stocks, which has yet to be confirmed.”. As of the press release of Beijing business daily, there was no response from relevant people.
For Zhihu’s commercialization, most people in the industry think that it is time to go public when they are 10 years old. According to the previous case of Internet companies listing, Zhihu is much slower. Compared with the companies established in the same period, Kuaihuo was established three months later, but it has submitted its prospectus to the Hong Kong Stock Exchange last month. Station B was established in June 2009, half a year earlier than Zhihu, and was listed in the United States in March 2018.
On the contrary, Zhihu has been keeping a low profile, and there has been almost no capital action in the past year. According to the information of the eye, we have completed the 8 round of financing as of now. The latest round was the F round in August 2019, which was invested by Baidu, Kwai Fu, Tencent and so on, totaling 434 million US dollars.
In fact, in terms of brand recognition, Zhihu is no inferior to Internet applications in the same period. At the beginning of its establishment, Zhihu not only attracted Li Kaifu, founder of Innovation workshop, Xu Xiaoping, founder of Zhenge fund, and other big men to settle in, and professionals in vertical field also emerged in an endless stream. For a while, Zhihu’s brand image was obvious.
But it is such an Internet enterprise that has been sought after by many big men as soon as it goes online. Wang Chao, founder of Wenyuan think tank, told Beijing Business Daily: “there are two possibilities. One is that senior executives think that the company is undervalued and will suffer from going public. Second, the founders don’t want to be fettered by investors and want to develop freely. ” Wang Chao guessed that the former was a little more.
Why users are not high and valuations are high
To say that it is undervalued, compared with the same type of enterprises, Zhihu’s valuation is not low.
Zhihu has no comparable enterprises in China for the time being. The most similar product is quora, an overseas Q & a platform. When the f round of financing is completed in August 2019, it is said that Zhihu will be valued at US $3.5 billion after financing. Quora is valued at $2 billion.
According to the official data of Zhihu at that time, as of January 2019, Zhihu had 220 million users, 380000 topics and 130 million answers. Since then, Zhihu officials have not updated the user data. Relevant people only disclosed to the Beijing Business Daily that Zhihu has accumulated more than 44 million questions and 240 million answers so far.
The reporter of Beijing business daily sorted out the public information and found that Zhihu and quora did not have the same period and same dimension user data. According to previous reports, quora had 100 million independent user visits in 2018.
Li Jinqing, an analyst with Bida consulting, believes that Zhihu and quora both started with Q & A, but now the two businesses are not quite the same. “Quora is a Q & a community. Zhihu is more like a content community, or a content community in the form of Q & A. This difference has gradually made Zhihu more and more businesses, such as Q & A, live broadcast, members, etc. With a richer business, more stories can be told to investors, and there will be more room for valuation to rise, “said Li Jinqing.
Zhang Yi, CEO of AI media consulting, explained to Beijing business daily from the capital level, “compared with quora, Zhihu has more young users. Generally speaking, the capital side is more optimistic about the platform with more young users. In addition, the investors of quora are basically institutional investors, who are generally cautious about valuation. Zhihu was dominated by institutional investors in the early stage, and strategic investors such as Tencent in the later stage. Strategic investors also pursue commercial returns on investment, but they mainly want to build their own moat of content through investment, so they will give a higher valuation. “.
Why is commercialization full of twists and turns
On the other hand, Zhihu’s business has been expanding and more and more strategic investors have made Zhihu’s brand positioning more and more vague.
For ordinary users and third-party platforms, there is no unified answer. According to the classification of Apple’s app stores, Zhihu ranked in the top five of the free social networking list for a long time. On December 23, Zhihu ranked behind wechat, QQ, xiaohongshu and Weibo. There are obvious differences between Zhihu and each of the above-mentioned companies, but there are also similar businesses.
However, in the fierce Internet competition, what is not important is the liquidity. Since 2016, Zhihu has tried almost all possible paths of knowledge payment. In 2017, Zhihu officially began to commercialize, no longer covering the desire for realization.
In 2019, Zhang Rongle, vice president of Zhihu and head of member business department, said, “salt selection members and advertising business have become two major directions of Zhihu’s commercialization.”. On December 23, Zhihu related people told Beijing Business Daily: “at present, Zhihu’s business model is mainly advertising and membership. Haowu recommendation, a form of community content realization, also has a good performance.” However, the person did not tell the specific revenue scale and structure.
In Zhang Yi’s view, Zhihu’s commercialization is very cautious and not smooth. The reason is that “Zhihu is a community, most of its young users, and it is difficult to guarantee the quality and health of its content, which makes Zhihu in a dilemma. This is also the reason why Zhihu launched its listing relatively late.”.

Wang Chao also mentioned the contradiction between Zhihu’s content and commercialization, “Zhihu’s commercialization is too early, which has caused serious conflict with the content, leading to the rapid decline of content quality and the bottleneck of user growth.”. Beijing Business Daily reporter Wei Wei