After watching Soul’s data, I found that the social track of strangers collapsed

Introduction: Low retention, difficulty in profit, and compliance risks are the root causes of the collapse of the social track of strangers.

On June 30, 2022, Soul, which focuses on the social network of strangers, officially submitted an application for listing Hong Kong stocks, and Bank of China and CICC as the joint sponsors of the IPO.

This is the second time Soul impacted the IPO.

On May 10 a year ago, Soul also submitted an F-1 form at Nasdaq and planned to go public in the United States. But the day before the bell, Soul suddenly withdrew the IPO registration and terminated listing.

Behind SOUL restarting the road of listing is a three -year loss of 2.2 billion yuan, and major shareholders constantly "blood transfusion".

01 marketing growth

Ranking according to the number of daily lives and the number of monthly activities, Soul is the top domestic social network platform.

Soul ranks daily in the social network industry. Source: Thousands of sails

The prospectus shows that Soul had 31.6 million monthly users in 2021, an increase of 51.6%year -on -year; the average number of live users was 9.3 million, a year -on -year increase of 55.8%.

Soul2019-2021 Data Source: Soul Hong Kong Stocks Prospectus

Behind the good data is the huge marketing investment.

The prospectus shows that in the past three years, Soul's sales and marketing expenses have high, reaching 2 billion yuan, 620 million yuan, and 1.51 billion yuan. In three years, Soul burned 2.3 billion yuan in order to win users and markets.

In the first quarter of 2022, Soul sponsored many fiery variety shows such as "Friends, please listen to good", "Detective", "Chasing Light".

In 2021, Soul's figures frequently appeared at the Strawberry Music Festival, and short video platforms often brushed the slogan "Come to Soul".

Soul is on Strawberry Music Festival, Source: China Daily.com

After smashing a lot of funds, the revenue increased greatly: Soul increased from 70.7 million yuan to 1.281 billion yuan in 2019-2021, with a compound annual growth rate of over 325%.

However, people can find out at a glance that Soul's income growth cannot keep up with marketing and sales expenses. The common ending of this situation is that once you can't keep up, your growth will stagnate immediately.

SOUL 2019-2021 Revenue (Unit: 100 million yuan) Source: Soul Hong Kong Stocks Prospectus, Alpha Factory

In the model of burning money for growth, the net loss of Soul from 2019-2021 has reached 353 million yuan, 579 million yuan, and 1.324 billion yuan, respectively, with a cumulative loss of 2.256 billion yuan in three years.

Soul 2019-2021 Lost loss (unit: 100 million yuan) Source: Soul Hong Kong stock prospectus, Alpha Factory

Such a flower method is unsustainable only by transfusion of blood transfusion of shareholders of VC/PE. In addition, most investment institutions in 7 rounds of financing also have the need to withdraw from investment returns.

After withdrawing the IPO of U.S. stocks, this transfer to the Hong Kong Stock Exchange can be said to be a explanation of the investors regardless of the result.

02 Target Z generation

Zhang Lu is the helm behind Soul. She is now 37 years old and has multiple positions -the founder, chairman, executive director and CEO of Soul.

After graduating from English major in Sun Yat -sen University in 2007, she entered the Shanghai Nielsen Market Research Company to participate in data mining and analysis, and consumer behavior research projects.

In 2009, Zhang Lu joined the Innext Management Consulting Company, and then rose to the general manager of China. He established the Chinese consulting team in one hand until 2015. Zhang Lu resigned and started a business from a foreign company's executive position, and founded Soul's parent company "Shanghai Renyimen Technology Co., Ltd." in 2015.

"I remember what I wanted to say at the time, but I couldn't send it on WeChat, and then I sent it to QQ space and set it to be seen by myself. At that moment, I felt like there was no product like Soul." Zhang Lu said in an exclusive interview.

For products like Soul, Zhang Lu refers to a "very simple" demand- "freely publish content, and someone interacts with me."

It is also Zhang Lu's thought that soul was born. Soul's English meaning is "soul". Zhang Lu established Soul, hoping that users can find "soul partners" on the platform to make the world no lonely person. "

According to the prospectus information, in addition to Zhang Lu in the post -85s, the average age of the company's core management is only 36 years old. Young management is bound to bring back the company's management, strategy and playback.

From the prospectus, 74.9%of the users of Soul are young people who mainly focusing on generations (a generation born from 1995 to 2009).

The "Digital Economy Panorama White Paper" released by Analysys Analysis shows that in 2022, the scale of digital users in China Z accounted for 17.5%of the overall scale (1.05 billion).

From the perspective of consumer concepts, as a generation who grew up with the development of China's Internet, Internet memory roots are planted in the consumer cells of generations.

They are generally superior in their families. The proportion of medium or even high consumption is higher than other user groups. They are more willing to spend money and have a higher degree of independent decision -making in consumption.

Gen Z's consumption capacity distribution and channel cognition. Source: Analysys Analysis of "Digital Economy Panorama White Paper" Soul wants to use algorithms to match users, link strangers with interest, and perform "soul social" without face.

Soul also introduces gaming interactive functions in the application. The purpose is to hope that by adding playability, increase the stickiness of generations of generations, and improve activity.

Soul planet match, source: 36kr

This gameplay did resonate with the young people of generations. With less than two years of launch, Soul became the most popular stranger social software for the post -95s.

03 The circuit has collapsed

Soul can throw a lot of money and rush to the listing stage under the pressure of losing money. It is inseparable from the continuous blood transfusion of major shareholder Tencent Holdings (0700.HK).

The Hong Kong stock market shows that since 2016, Soul has conducted a total of 7 rounds of financing.

Among them, in 2020, Tencent invested 135 million US dollars through a subsidiary image structure, temporarily slowing the financial crisis of Soul. After terminating the US stock IPO, Tencent cooperated with Mihayou to invest $ 177 million.

Source: SOUL Hong Kong Stocks Prospectus, Alpha Factory

On March 17, 2021, the industry reported that Soul is about to be the US stock IPO. According to several media reports, Soul was communicating with potential investors at that time to raise funds for $ 200 million and valuation to $ 2 billion (about 13 billion yuan).

SOUL financing history, source: Soul Hong Kong stock prospectus

Less than 2 months later, Soul submitted a prospectus in Nasdaq, and there was no scenery.

The valuation of 13 billion yuan is equivalent to twice the industry leader Momo and visiting parent company, Momo.o.

The market value of Zhiwen Group has also had a peak of more than $ 10 billion, but after the highlighting period of strangers' social tracks, according to the closing price on July 22, its market value has fallen to $ 893 million.

Zhiwen Group's stock price trend, source: the same flowers smooth iFind

The highlights of strangers' social tracks began in 2011.

In 2011, Momo went online to start the domestic strangers of the country. In December 2014, Momo was listed on Nasdaq. In 2018, the amount of financing received by strangers reached the highest peak of ten years, totaling 16.199 billion yuan. In February of the same year, Momo acquired and explored for $ 771 million (about RMB 4.862 billion).

In November 2017, Wang Yu, the founder and then CEO of the visit, announced that it had 110 million registered users at the time, MAU (number of monthly active users) reached 20 million, and DAU (number of daily active users) was about 7 million.

According to the Bida Consultation Monitoring data, as of June 2018, the monthly exploring MAU in more than 22.66 million MAU topped the monthly ranking list, far exceeding the fate of the second century that ranked second with 4.094 million people at the time.

Explore MAU, Source: Thousand Sails

According to the contents of the person in charge of SOUL in January 2019, SOUL registered users have just exceeded 50 million.

According to the U.S. stock market prospectus, the average MAU of Soul in 2020 reached 20.8 million, and it was not as good as the number of 2018 numbers.

However, in April 2019, the exploration suddenly removed from the Android market and the Apple Store. Since then, the number of active users has fallen all the way, giving Soul the opportunity to live later.

Compared with the mau of the explore

By March 2021, the average daul DAU and average MAU rose to 9.1 million and 33.2 million, respectively.

From the perspective of user portraits, Soul is similar to the age distribution of the user's user.

From the chart, in 2018, the DAU/MAU data performance should be almost the same.

After the completion of the C -round C financing in 2018, the valuation of Soul has reached $ 1.5 billion. This means that the valuation of Soul exceeds double the valuation of the acquisition and acquisition.

The rapid development of the industry has attracted a lot of enterprises to pour in, and the social network of strangers was once known as the "100 billion blue ocean super track". From 2011 to 2021, the total financing of strangers was nearly 29.2 billion.

However, after the highlights, the industry financing scale has shown a sharp decline. The capital heat disappeared very fast: In 2021, there were only 7 financing on the social track of strangers, and the total amount of financing was only 87 million yuan, which was basically abandoned by investors.

Source: Enterprise Check

04 Profit is too single

In the period of industry dividends, all companies have been blessed by Fuze: user growth, double revenue, and lucky on the ground.

But as soon as the tide retreats, the scenery is not enough.

SOUL's income is mainly three aspects: value -added services, advertisements, and good -looking malls.

Soul 2019-2021 Revenue Source: Soul Hong Kong Stocks Prospectus

Among them, value -added services account for 93.9%. The value -added service mainly refers to the user's "purchase of virtual items and membership subscriptions".

Advertising business accounts for only 6.1%, and the business income of the mall is almost available.

This income composition is very single for a social APP, and a single income method will limit Soul's future development path.

In the Soul APP, building virtual avatars and labels to build virtual avatars, buy gifts for image construction, group chat, or pet planets are all QQ gameplay 20 years ago. Soul group chat source: soul app

"It feels similar to the previous QQ avatar, QQ show, and QQ space. Soul coins are a bit like QQ coins. There is no difference." A user who has given up with Soul said.

If you look closely, you will find that the social networking of strangers restricts Soul's business play.

It is because of most of the things purchased by Soul. Whether it is rewarding, gifts, decorative avatars, etc., it is difficult to be based on a real social network like WeChat, and Soul's "dream" is not enough, so the degree of "dreaming" is not enough. Many users are unwilling to spend this injustice.

From 2019 to 2021, the average monthly income of Soul per month is only RMB 21.9, 43.5 and 60.5 yuan.

SOUL monetization ability, source: SOUL Hong Kong stock prospectus

SOUL's proportion of paid users within three years is 2.3%, 4.5%, and 5.2%, and more than 94%of users still do not consume on the APP. It is exciting to smash the heavy Soul in terms of marketing.

What can be compared is Momo. Before the lack of "gold absorption", Momo had already insight into the ceiling of the stranger's social track. After the transformation and opening up the live broadcast business, the net profit of US $ 145 million was achieved in the first year.

Today's Soul has changed the slogan. From the original social app that solves the lonely sense of young people to the "social Yuan universe". Soul officially wrote: Soul is committed to creating a young man's social Yuan universe.

05 maximum hidden danger

In addition to performance, the model of strangers made friends, so that Soul has always had huge challenges in terms of safety supervision. This is also the biggest hidden danger of all strangers' social platforms.

In June 2019, SOUL was removed by regulatory agencies for illegal content such as obscene pornography.

The special rectification notice of the Internet Information Office, Source: China Network Information Network

The problem of "killing piglets" fraud is Soul's headache. Soul focuses on the social interaction of strangers, and it is inevitable that scammers drill the empty and use emotion as a shield to deceive money.

In the incomplete statistics of the public security department notice and the media publicly reported, there are more than 14 cases that have occurred on the Soul platform in the past three years, and the amount involved ranges from tens of thousands to millions. The highest amount is even more than 8 million yuan, and the total amount exceeds 17 million yuan.

The case of "killing piglets" involved in soul, source: various media reports, Alpha Factory finishing

These emotional scams have made Soul users, especially women's trust in APP, so they have a lot of loss of old users while growing, which has a lot of negative impact on Soul's reputation.

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