You’d think $91 per user is a pretty high price to put on an internet company.
Compared to other big U.S. listings over the past few years however, Qu Toutiao could be relatively tame. At a valuation of $179 per user at the end of its first
Qu Toutiao’s U.S. IPO target valuation sounds expensive, but it’s not entirely out of line
Admittedly, Qu Toutiao’s business model isn’t the same. Not to be confused with the more famous Jinri Toutiao, Qu Toutiao’s name translates as “fun headlines” and the company delivers customized news and video feeds collated from major Chinese outlets. Facebook Inc., on the other hand, is far more interactive, while Snap is, well, hip.
Ultimately, what these companies seek to do is monetize eyeballs and Qu Toutiao thinks it has a winning formula. At 3 percent of the user base of Tencent Holdings Ltd.’s WeChat messenger, there’s plenty of room to grow. Yet competition for users’ time is also extremely high, from WeChat, Jinri Toutiao and many others.
A $3 billion valuation for such a small company does seem a little ridiculous. But it’s not entirely crazy.
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