Why did Kuaishou want to buy Station A?

On the morning of June 5, Kuaishou confirmed that it had completed the overall acquisition of Acfun. In the future, A Station will maintain an independent brand, maintain independent operation, maintain the original team, and develop independently. Kuaishou will also provide strong support to A Station in terms of funds, resources, and technology.

Kuaishou told China Makers that there is no other news to announce at the moment. Station A responded to China Makers that there are no other adjustments internally and the team remains unchanged.

With the rise of TikTok and the BAT companies all planning their short video business, Kuaishou's move on Station A is somewhat surprising. Earlier, media reports said that after Yunfeng Fund and Alibaba behind it gave up their controlling stake in Station A, Toutiao was interested in taking over Station A and had contacted Station A many times.

Internet analyst Ding Dao Shi told Looking for Chinese Makers that Kuaishou's decision to acquire Station A at this time was, firstly, because the price was relatively low, and secondly, although Station A's business was not doing well, its users were very valuable and could complement Kuaishou's users.

How much is Station A worth?

According to the information from the Enterprise Credit Publicity System, Beijing Sairuisdong Culture Communication Co., Ltd. (a subsidiary of Station A) had two equity pledge records at the end of February this year.

On February 27, Seres pledged 2,560 shares of Youyi Xingji (Beijing) Technology Co., Ltd. to Beijing Kuaishou Technology Co., Ltd.; on March 6, Guangzhou Danmu Network Technology Co., Ltd. (the operating entity of Station A) pledged its shares in Seres to Kuaishou.

This morning, Kuaishou officially announced the completion of the overall acquisition of Acfun. Kuaishou did not disclose the acquisition price, but according to public reports at the end of last year, when A was negotiating with Alibaba, its pre-investment valuation was 750 million yuan, which was more than half of its valuation of 1.85 billion yuan in its last round of financing.

According to the announcement released by ChinaNet at noon today, the company and Kuaishou signed a "Transfer Agreement", intending to sell all of the company's interests in Station A to Kuaishou, with a total transfer amount of 140 million yuan.

In November 2016, China Online subscribed for 13.51% of Station A's equity for RMB 250 million. China Online said that up to now, China Online has only paid RMB 139 million in advance. Because the capital increase agreement signed between the company and Station A had "preconditions precedent" and Station A failed to meet the relevant requirements, the company did not pay the full amount of the reserved investment and did not make industrial and commercial changes.

This time, Chinese Online sold all of its shares in Station A for RMB 140 million. If this portion still accounts for 13.51%, it can be calculated that the valuation of Kuaishou's acquisition of Station A is approximately RMB 1.037 billion.

A station users complement Kuaishou

The situation of Station A is not optimistic. According to public reports, the actual DAU of Station A dropped to 1.6 million in November last year, including 900,000 on PC and 450,000 on mobile. The peak of this number was 12 million in January last year, when the average monthly DAU was 8 million.

Why did Kuaishou acquire Station A when the data dropped sharply?

An entertainment investor told China Makers that this acquisition has two benefits for Kuaishou: it can increase the coverage of the crowd and broaden the user circle. At the same time, it can increase revenue and prepare for listing. For Station A, Kuaishou's traffic is a supplement, and secondly, capital is also an important factor.

Aurora Big Data's data analysis shows that in terms of gender distribution, both Station A and Kuaishou have slightly more male users than female users, and the male-female ratio of the two user groups is similar. The user city distribution results show that Station A has a larger proportion of users in first-tier cities, accounting for 20.04%, and new first-tier and second-tier cities also have a high proportion of Station A users.

Kuaishou's users are relatively more down-market, with more than 60% of them in third-tier cities and below. In terms of specific city distribution, Beijing, Shanghai, Guangzhou and Shenzhen are the top four cities in terms of the proportion of users on Station A, and the concentration of Kuaishou users in the top cities is not significant.

Internet analyst Ding Daoshi believes that although Station A is not doing well, its users are still very valuable. "If the acquisition is completed, I believe Kuaishou will soon turn these users over to form a complementary relationship."

The team experienced four shocks with the capital

Station A was founded in June 2007 and is the first barrage video website in mainland China. However, due to frequent changes in its capital and several rotations of senior executives, it has fallen behind its competitor Station B step by step. There have even been reports that the website cannot be opened, has been suspended, or has been closed.

On November 25, 2017, the AcFun website could not be opened. On February 2, 2018, the A-station website was inaccessible again. Earlier, there were media reports that the A-station server would expire on the evening of January 31, and if it could not renew, it would face the risk of shutting down the server. However, before the acquisition, A-station was operating normally.

Tianyancha information shows that before this round of acquisition, Station A had received four rounds of financing, namely, in August 2015, the US$50 million A round of financing from Tudou Tudou Inc.; in January 2016, the US$60 million A+ round of financing from SoftBank China Capital; in August 2016, the RMB 50 million strategic financing from Huace Film & TV; and in November 2016, the RMB 250 million B round of financing from China Online.

Unlike Station B, which has a very stable management team, every capital change of Station A is accompanied by a change in the management team. From 2014 to 2016, Station A experienced four leadership changes.

In 2014, Chen Shaojie, the major shareholder of A站, left, and the Aofei Group invested in A站 and became the largest shareholder, holding 92% of the shares. After that, Simon, the former head of A站, left due to "disagreement in concepts", and the Aofei Group entered the management. In April 2015, the legal representative and chairman of A站 was replaced by Sun Min from Cai Zhaozhan, the former domestic marketing director of Aofei Animation. The shares of Cai Dongqing of Aofei Group were reduced from 92% to 51%, and Sun Min held 41%. In August, Sun Min became CEO and Liu Yanyan became editor-in-chief. In 2015, Youku Tudou invested 50 million US dollars and reshuffled the management.

In January 2016, SoftBank China invested 60 million US dollars in A站, and the core team underwent another major change. Mo Ran replaced Sun Min as CEO. In July 2016, Liu Yanyan, the former editor-in-chief of A站, took over from Mo Ran as CEO, and Li Bin, vice president and chief strategy officer of Aofei Entertainment, became chairman.

A former senior executive of Station A said, “Every time there is a change in management, everyone will say it’s a new beginning, but in the end, everyone becomes the beginning itself.”

After the news of this round of acquisition was announced, Station A told Looking for Chinese Makers that there are currently no adjustments to the team.

What is the purpose of short video giants' layout of subculture?

Earlier, there were media reports that Toutiao had been paying attention to Station A for a long time and had contacted Station A many times. After Yunfeng Fund and Alibaba behind it gave up their controlling stake in Station A, it just gave Toutiao an opportunity.

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.