NetEase Cloud Music, a music app owned by Chinese tech giant NetEase Inc., plans to go public in Hong Kong and may formally file for an IPO next year, according to Jiemian.com, citing people familiar with the matter.
NetEase Cloud Music was launched in April 2013. The company had disclosed in November 2018 that it had 600 million registered users, before revealing in its Q2 2019 earnings meeting that the figure had surpassed 800 million, up 50 percent year-on-year.
Currently, NetEase Cloud Music adopts a diversified business model involving advertising, membership, paid music, live music streaming, performance ticketing, music peripherals, and has experimented with commercialization paths such as IP licensing.
In the second quarter of 2019, the number of paid active members of NetEase Cloud Music increased 135% year-on-year.
Regarding the profit sources of NetEase Cloud Music, NetEase CEO Ding Lei had said in the NetEase earnings meeting that it’s membership, advertising, live audio streaming, and the exploration of stronger social features of Cloud Music.
"We are confident and sure about the profitability of these four areas." He said.
After the departure of NetEase Cloud Music’s VP of marketing, Li Yin, on March 3, Ding has assumed the role of NetEase Cloud Music CEO to take charge of the business, according to LatePost.
NetEase Cloud Music's direct competitor in the Chinese market is Tencent Music Group, which includes QQ Music, Kugou Music, and Kuwo Music, which successfully landed on Nasdaq in December 2018 and has a current market cap of $44.8 billion.
Tencent Music's Q3 2020 earnings report showed that the company's total revenue for the quarter was RMB 7.58 billion yuan ($11.6 billion), up 16.4% year-on-year.
Tencent Music reached 800 million monthly active users, and the number of paid online music users grew to 51.7 million, up 46% year-on-year. The online music payment rate was 8%, compared to 5.4% in the same period in 2019.
Since its inception, NetEase Cloud Music has had a relatively steady funding pace. The company has had three public funding rounds to date, according to data provider Tianyancha app.
The company completed an RMB 750 million yuan Series A financing in April 2017, with investors including CICC and Mango Ventures.
The company completed more than $600 million in Series B financing in November 2018, with investments from Baidu, General Atlantic, Boyu Capital, and others.
The company closed a $700 million Series B2 round in September 2019, with Alibaba as the lead investor.
NetEase Cloud Music was valued at RMB 8 billion yuan, $3.5 billion, and $7 billion after the three aforementioned financing rounds, respectively.
NetEase testing app that will compete with Alibaba's DingTalk
(Source: CnTechPost)
