Valuation increased by 1200 times in 8 years, Himalaya is about to go public

Can Himalaya succeed in realizing its dream with full preparation?

The road to listing for Himalaya has been quite bumpy.

As early as May 2021, the company intended to go public on the US stock market. However, four months later, due to changes in the market environment, Himalaya chose to turn to the Hong Kong stock market, but unfortunately, it failed to do so twice. After more than a year of preparation, the company is once again making a push for an IPO.

After years of hard work, Yu Jianjun and Chen Yuxin (Chen Xiaoyu) have led the company to become China's largest online audio platform, with over 2.9 million content creators and 300 million monthly active users. In addition, the company's annual revenue exceeds 6 billion yuan, and it has been profitable for two consecutive years, with profits exceeding 3.6 billion yuan each year.

With the support of Tencent, SIG Haina Asia, KPCB, Sierra Ventures, Xingwang Investment, ZhiXin Capital, Yuewen Group, Xiaomi, TAL Education, Huashan Capital, Broadband Capital, PwC Capital, Genesis Capital, Atlantic Bridge, Songhe Capital, Sony Music Entertainment, Sparkle Capital, Whale Capital, and Rain Capital, Himalaya has raised nearly 10 billion yuan in total financing, and its valuation has increased by more than 1200 times in 8 years, reaching approximately 4.345 billion US dollars (approximately 30.4 billion yuan).

At this point, as Himalaya once again attempts to list on the Hong Kong Stock Exchange, it is clear that the company has made thorough preparations. Whether it can ultimately realize its dream remains to be seen.

Multiple entrepreneurial ventures, with a net worth exceeding 3 billion yuan

As a serial entrepreneur, Yu Jianjun, a native of Fujian, began his entrepreneurial journey while pursuing a master's degree at Xi'an Jiaotong University.

Driven by his interest in web programming, he and his classmates developed a software based on modeling called "Simulate China," and even secured a million yuan in investment. Although the project ultimately failed, the process of entrepreneurship brought him a different kind of joy.

After graduating with a master's degree in 2001, he founded a panoramic stitching software company, "Jietu Software," in Shanghai. Realizing that the value of internet companies depends on the number of users, he set a goal in 2004 to create a mass internet platform product serving hundreds of millions of users, and eventually chose to sell his stake in the company and start anew.

Over the course of several years, Yu Jianjun embarked on nearly 10 entrepreneurial ventures and explored more than 40 directions. In this process, he not only sold the "City8" street view map project to Baidu but also, together with Chen Yuxin (Chen Xiaoyu), a former investment director at China Renaissance, created a virtual world based on street view technology called "Nali World."

Although this initial collaboration between the two partners was not successful, they continued to lead the team in exploring new directions. Recognizing the potential for a mobile internet explosion, they believed that sound could better convey emotions and knowledge, and thus decided to make "mobile audio" their new entrepreneurial direction.

This time, they made the right bet. Himalaya was established in Pudong, Shanghai in August 2012. In March of the following year, the "Himalaya FM" mobile app was officially launched, covering various categories such as audio novels, music, and training lectures. By the end of 2014, Himalaya's user base had exceeded 100 million. Over four years later, the company's user base surpassed 600 million.

The company's success can be attributed to its strong emphasis on content. In Yu Jianjun's view, the long-term competition in the audio platform industry lies in the content barrier. "To build a content platform, it is essential to provide users with good content to attract more people to create good content on the platform."

In addition to early investment in copyrights during the initial stages of development, Himalaya continuously improved its "PGC+PUGC+UGC" content ecosystem, collaborating deeply with figures such as Guan Qingyou, Yu Qiuyu, and Guo Degang, as well as partnering with over 220 leading publishing houses and approximately 150 top online literature platforms in China, including CITIC Press.

Realizing that "audio is naturally a knowledge medium," the company began to explore the business model of knowledge payment and, in June 2016, collaborated with Ma Dong, the founder of Miwei Media, to launch the paid content program "Speaking Well," which generated over 5 million yuan in revenue on the first day. In the same year, the company also initiated the industry's first knowledge festival, "123 Knowledge Carnival," with a transaction volume exceeding 50 million yuan on the day of the event.

Starting in 2017, Himalaya ventured into the offline market, launching the Xiaoya AI smart speaker. Furthermore, the company not only reached partnerships with companies such as Alibaba, Xiaomi, and Baidu in integrating Himalaya's audio content into smart speakers but also provided in-car audio content for over 70 automobile manufacturers, including Tesla China, Mercedes-Benz, BMW, Audi, Geely, and BYD, through pre-installed devices.

With the rise of podcasts and AIGC, the company focused on deepening its podcast business while also developing the Himalaya Everest Audio AI model and launching the all-in-one AI-empowered production tool "Yinjian" to help creators easily produce podcast and other audio content.

After more than a decade of development, Himalaya has grown into a leading online audio platform in China. Meanwhile, both Yu Jianjun and Chen Yuxin, who respectively held over 10% of the company's shares before its listing, have a net worth exceeding 3 billion yuan.

With over 300 million monthly active users, the company earned over 3.7 billion yuan in a year

Utilizing sound, Himalaya has established a vast audio content ecosystem.

Through over 2.9 million content creators, the company has amassed over 488 million pieces of audio content, with a total content duration of 36 billion minutes. The range of audio content is quite extensive, covering 459 categories including personal growth, history and humanities, parent-child relationships, business and finance, as well as entertainment.

In addition, Himalaya's AI can independently produce an entire audio book album or assist audio book producers as a co-producer. Compared to the production process entirely carried out by human content creators, the production time for audio books produced solely by AI has been reduced by over 50 times, while the production time for high-quality audio books with limited adjustments by AI audio book producers has been reduced by over three times.

With the help of intelligent search, intelligent recommendations, real-time interaction, and other functions, the audio content community created by the company has attracted an increasing number of users. By 2023, Himalaya's average total monthly active users exceeded 300 million, with an average of 133 million monthly active users on mobile devices and approximately 169 million monthly active users on IoT and other platforms.

The user engagement is also quite high. In 2023, the average daily listening time for active users on mobile devices was about 130 minutes. During the same period, the platform had an average of 15.8 million monthly active paying users on mobile devices, with auto-renewing members and annual paying members accounting for approximately 72.3%.

According to Zhishi Consultancy, Himalaya's mobile users spent a total of 178.73 billion minutes listening to audio content in 2023. Based on the total listening time on mobile devices and the overall online audio revenue in 2023, this company is the largest online audio platform in China.

With the recognition of numerous users, Himalaya has seen its revenue rise steadily through monetization models such as subscriptions, advertising, and live broadcasts, and has successfully achieved profitability. According to its prospectus, the company's revenue for the reporting periods from 2021 to 2023 were 5.857 billion yuan, 6.061 billion yuan, and 6.163 billion yuan, respectively, with net profits reaching -5.106 billion yuan, 3.699 billion yuan, and 3.736 billion yuan, respectively.

According to Zhishi Consultancy's forecast, the revenue of China's online audio market is expected to increase from 25 billion yuan in 2023 to 51 billion yuan in 2028, with a compound annual growth rate of 15.3%.

For Himalaya, facing competition from rivals such as Dragonfly FM and Lizhi in this multi-billion-dollar market is also a significant challenge if it wants to maintain its leading position in the long term.

Raising nearly 10 billion yuan, valuation increased over 1200 times in 8 years

Himalaya has completed a total of 12 rounds of financing, accumulating nearly 10 billion yuan.

Records show that as early as its establishment in 2012, Ximalaya received 15 million yuan from ChinaEquity Group, jointly initiated by Yu Jianjun and Chen Yuxin. Prior to that, ChinaEquity Group was also an investor in "That World," directly investing 20 million yuan in the project.

In 2014, Himalaya completed an A-round financing of approximately 115 million US dollars, with investors including SIG Haina Asia, IDG Capital, and Sierra Ventures. In the same year, the company also received investments from Huashan Capital, Broadband Capital, and Sparkle Roll Capital in December.

In 2015, the company received investments from ChinaEquity Group, PwC Capital, Xingwang Investment, Yuewen Group, Genesis Capital, and ZhiXin Capital. The following year, the company received investments from Xiaomi, TAL Education Group, Xingwang Investment, Genesis Capital, and Sparkle Roll Capital.

Reports indicate that in the D-round financing in 2017, Hejing Capital and Rain Capital became shareholders of Himalaya through the purchase of old shares. Starting from 2019, the company raised over 900 million US dollars through Series E financing, with investors including SIG Haina Asia, TAL Education Group, PwC Capital, Atlantic Bridge, Tencent, Xingwang Investment, Songhe Capital, Sony Music Entertainment, ZhiXin Capital, and Hejing Capital.

From 3.45 million US dollars in 2012 to 4.345 billion US dollars in 2020, Himalaya's valuation has increased by over 1200 times in 8 years.

Before going public, Xingwang Investment held 10.37% of the shares, ZhiXin Capital held 9.94%, Tencent held 5.33%, Atlantic Bridge Capital held 4.1%, PwC Capital held 4.04%, Xiaomi held 3.38%, Yuewen Group held 3.05%, Hejing Capital held 2.9%, and Genesis Capital held 2.11%.

Based on the rough calculation of a 43.45 billion US dollar valuation, the value of these investors' holdings is approximately 450 million US dollars, 432 million US dollars, 232 million US dollars, 178 million US dollars, 176 million US dollars, 147 million US dollars, 133 million US dollars, 126 million US dollars, and 92 million US dollars, respectively.

Having accompanied Himalaya's growth all the way, investors are now looking forward to their own moment of harvest.

References:

1. "Leader Yu Jianjun," China Entrepreneur Magazine

2. "Himalaya Yu Jianjun: Dreams Unfulfilled, Heart Unyielding, 'Idealism + Realism' Makes Entrepreneurship Easier to Succeed," Wenhui Daily

3. "Exclusive Interview with Himalaya Co-founder and Co-CEO Yu Jianjun: 'Ear Economy' Will Become a New Trend," Securities Times

4. "Multidimensional Sound Creator: Yu Jianjun," Pudong Cultural and Creative Industries

5. "640 Million People Listen for 145 Minutes Every Day, Himalaya Expands the 'Sound' of Audio," 21st Century Business Review