Chinese online Q&A platform Zhihu completed a $434 million F-round of financing on Monday, led by short video platform Kuaishou.
Why it matters: The funding could help Zhihu to revive plans to go public. It previously failed due to profitability issues among other undisclosed reasons.
- The Beijing-based firm’s funding is the largest round seen in China’s online content and entertainment segment over the last two years.
“Zhihu, Kuaishou, and Baidu are very different products for very different user scenarios, but they are all in a larger segment, and their users have similarities. All three platforms face ‘information isolated island’ problems and the rising cost of accessing high-quality content.”
—Zhihu CEO Zhou Yuan responding to a Zhihu question about the financing (our translation)
Details: Search giant Baidu also took part in the funding round, along with several previous investors, including Tencent and Capital Today.
- Previous investor Bytedance did not participate in the round. Yicai reported that founder Zhang Yiming was unwilling to boost the amount of funding.
- Zhihu CEO Zhou Yuan and Kuaishou founder Su Hu agreed on the short video platform’s investment during a lunchtime meeting two months ago.
- The platform, often regarded as China’s version of Quora, will leverage the expertise of Baidu and Kuaishou to upgrade the format of content, as well as how it is discovered and distributed, according to Zhou.
- In an internal letter, he said that the circumstances and stage of financing dictated that the platform could not tolerate any slackness. “If we are fast, we will live, and if we are slow, we will die,” he wrote.
Context: Zhihu completed its E-round last August, raising approximately $270 million at a valuation of $2.5 billion.
- Founded in 2011, Zhihu only started to monetize in 2017.
- Zhihu could try to list again in 2019, 36Kr cited an investor close to the platform as saying.
- Zhihu responded to reports that it laid off hundreds of employees in 2018, stating that the numbers were vastly exaggerated and cuts were within a reasonable range.