After ten years of hard work and losses, and three failed IPOs, Himalaya still hasn’t told its story well

A company that can’t tell a story won’t be able to make it, and a company that doesn’t tell a good story will be in a dilemma.

Recently, Himalaya, which is committed to tapping into the ear economy, received bad news from the capital market. It is reported that due to the lack of investor support for the financing plan, the listing time in Hong Kong has been postponed to September. In March this year, Himalaya submitted relevant materials to the Hong Kong Stock Exchange again. Before that, Himalaya had failed twice on the eve of its IPO.

As the largest online audio platform in China, Himalaya has been established for 10 years. Public information shows that the company's market share based on revenue is 28%, far ahead of other competitors. However, Himalaya, which has an absolute market share, did not launch its listing plan until last year. In contrast, its competitor Lizhi FM landed on the US stock market as early as 2020, becoming the first stock in the domestic online audio industry.

As we all know, starting small and growing big is the only way for a company to develop. For those great companies that started from scratch, building a great business is inseparable from the personal ability of the founder and the wisdom of the investors. And that unique business story often becomes the starting point of their cooperation.

In 2012, my country's mobile Internet development was in full swing. At that time, compared with key areas such as communications and e-commerce, the ear economy was undoubtedly a blue ocean. Thanks to the market environment at the time, Himalaya, which aims to provide users with spiritual food and a new lifestyle, also won the favor of capital with its unique story.

Data shows that from November 2015 to September 2017, Himalaya conducted multiple rounds of domestic financing. During this period, the company received investment from multiple investment institutions including Shanghai Zendai, Shanghai Xiquan, and Ningbo Chuangshi Phase I. However, in November 2018, several institutions that had previously participated in the company's financing announced their withdrawal, either reducing their capital or converting their investment in Himalaya into interest-free loans.

Although Himalaya told the outside world that the change was due to the company's consideration of building a VIE structure, such a large-scale equity change still affected market confidence. After all, the company needs a large amount of funds whether it is buying back shares or repaying loans. This is undoubtedly bad news for Himalaya, which is still burning money.

After the equity change was completed, Himalaya conducted four rounds of overseas financing in 2019 and 2020, raising a total of approximately US$902 million. Perhaps due to the frequent changes in equity, even though the VIE structure was established, the company did not go public immediately.

On May 1, 2021, Himalaya officially submitted an application for listing to the US SEC. However, affected by the tightening of US regulatory policies, the company withdrew its listing application four months later and turned to seek listing on the Hong Kong Stock Exchange. In March of this year, Himalaya submitted listing materials with updated data, and the outside world believed that it would also be successfully listed. However, the market now has news that the listing has been delayed due to fundraising.

So why did Himalaya, which previously could easily obtain multiple rounds of financing, now have difficulty finding $100 million in funding? Judging from its market performance, the underlying reason is that it did not tell the story of the ear economy well.

Like most Chinese Internet companies, Himalaya is also plagued by the problem of losses. Even though its average number of active users of mobile apps ranks first and its revenue has grown rapidly for three consecutive years, Himalaya is still in a loss-making state. Data shows that the company's total losses from 2019 to 2021 are close to 10 billion. For the company's investors, Himalaya, which has been in business for ten years, has undoubtedly not proven its story about the ear economy.

At the same time, as the market changes, Himalaya's original story about the ear economy has also been interpreted in many new versions. It is understood that in addition to the three major businesses of subscription, advertising and live broadcasting, the company's business in recent years has also expanded to the Internet of Things and in-vehicle scenarios.

In 2017, the company launched a hardware product, the Xiaoya AI speaker. However, judging from the market performance, the Xiaoya AI speaker did not bring significant growth to the company's revenue. Now its price has dropped from the original 999 yuan to 599 yuan. In 2021, the company reached cooperation with 76 automakers including Tesla, Mercedes-Benz, Geely and BYD. Himalaya will intervene in the in-vehicle scene by pre-installing software. However, the final effect of this move still needs to be tested by the market.

It is true that Himalaya's new attempt has given the company the ability to realize multiple monetizations, but the company still needs to face the current situation of low market penetration and solve the problem of increasing users' willingness to pay. In a sense, whether the above two major problems can be solved is also related to whether the story of ear economy can be realized.

Data shows that the penetration rate of China's online audio market in 2021 is only 20.2%, and the average daily time spent by active users on online audio is also ahead of short videos, long videos and online music. However, from the perspective of specific applications, QQ Music has more average monthly active users than Himalaya. This situation also indirectly reflects the fierce competition in the market where Himalaya is currently located.

The mobile Internet era emphasizes attention economy. In the early stages of development, each platform takes winning customers as its primary goal, and in the later stages, it takes increasing usage time as its goal.

Public information shows that the number of Internet users in my country in 2021 is 1.032 billion, and the growth rate is slowing down. For Internet companies, the slowdown in Internet user growth also means that they must pay more attention to increasing user time. In addition to competing with their peers, they also have to compete with competitors in other fields. There is no doubt that Himalaya will be one of them.

It can be seen that although the penetration rate of the domestic online audio market is lower than that of the United States, due to the difference in the market, the online audio market with a lower penetration rate will undoubtedly be under greater competitive pressure. For Himalaya, the storyteller of the ear economy story, these factors will also become obstacles that affect its ability to tell a good story.

Now, due to lack of investor support, Himalaya has suspended its listing. On the one hand, it is affected by the overall environment of Hong Kong stocks, and on the other hand, it is due to the market's lack of confidence in the ear economy. Different from the previous tolerant attitude of the capital market towards Internet companies, more and more investors are beginning to pay attention to the operating conditions and profitability of companies.

For those Internet companies that pursue economies of scale, the market share gained by burning money in the past will only magnify their weaknesses. In the future, how to prove that they can turn losses into profits and get rid of losses will also become an important dimension for investors to consider. For Himalaya, it should also rethink how to tell investors a good story about the ear economy.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.