Online reading app Midu has closed a Series B worth $100 million, according to its parent company, content aggregator Qutoutiao, on Wednesday.
Why it matters: As one of Qutoutiao’s main growth drivers, Midu is receiving more support from its parent company to prepare for a comeback following its three-month suspension.
- In July, Midu Novels was suspended along with two other major reading apps for allowing lowbrow and sexually suggestive content.
“Midu continues to play a crucial part in Qutoutiao’s overall content platform strategy. We have a clear roadmap ahead for Midu, and our objectives of reaching more than 10 million DAUs [daily active users] by the end of the year and becoming the largest online literature platform in China by 2020 remain unchanged.”
—Tan Siliang, Chairman and CEO of Qutoutiao
Details: The financing round in the Midu business unit, which includes Midu Novels and Midu Novels Lite, was led by CMC Capital and included Qutoutiao.
- The cash infusion will be used for acquiring content, constructing a content creator ecosystem, and marketing purposes.
- Qutoutiao remains Midu’s holding company.
- Midu Novels has undergone a series of upgrades since its suspension on July 16. The app resumed regular content updates and commercial activities on October 16.
Regulators suspend three reading platforms for lowbrow content
Context: Launched in May 2018, Midu Novels has around 6.2 million DAU as of March 2019, according to figures from analytics firm QuestMobile.
- Midu Novels has a self-reported average use time of two hours per DAU.
- The company said during its Q2 earnings call that it expects by year-end 10 million to 15 million total DAU for Midu Novels and Midu Novels Lite, and daily revenue of RMB 2 million to RMB 3 million, according to 36Kr.