Qutoutiao Announces Investment by Alibaba – Nasdaq
What happened: Alibaba invested $171 million in the popular mobile content startup Qutoutiao, entering into a convertible loan agreement that gives the tech giant 4% of shares upon full conversion. Shares of Quotoutiao, which have skyrocketed 88% in the past three months, surged 12% after the announcement and before markets opened for the day.
Why it’s important: Qutoutiao, which recently recorded large net losses despite impressive growth in monthly active users (MAU) and net revenues, should welcome Alibaba’s investment as both a vote of confidence and a useful cash infusion to mitigate the costs of rapid expansion. Founded in 2016, the content aggregator already has 93.8 million MAU who on average spend over an hour using the app each day. Qutoutiao is already backed by Alibaba competitor Tencent, which led a $200 million Series B before its IPO in September.