For some understanding of how heated the Chinese startup market has been, consider that a China-founded media platform covering the action, 36Kr Holdings, went after a Nasdaq listing only nine years after its founding in Beijing by a first-time entrepreneur Chengcheng Liu.
Liu told me he went for the trophy IPO in the U.S. for “improving our brand image.” He acknowledged that it is a tough time for Chinese companies to go public in New York, considering the ongoing tensions over trade and tech power between the two superpowers China and the U.S.
The going public move was a bold one for the 30-year-old, who has seen dozens of Chinese startups he’s covered over the years go down the same road. His own move paid off, sort of. His startup filed to raise $57.6 million but slashed the offering size and tumbled by 10 percent in its Nasdaq debut to end up raising $20 million. That’s a small sum compared with the $50 million in venture capital that 36KR has taken in from investors including subsidiaries of China’s ride-sharing leader Didi Chuxing and smart phone and smart device maker Xiaomi as well as Matrix Partners China and Infinity Ventures.
The business as a standalone media operation covering China’s new economy probably wouldn’t have made nearly this far except for a 2017 transition to business services. Its model has switched to providing news and commentary and also selling data to companies and offering consulting instead of relying on advertising revenues and subscriptions – the traditional business models for media. With managers still trying to figure out China or enter the market, such business services has become a fast-growing business.
Nearly half of the company’s revenues come from business services that can help large companies connect with newly established entrants, Liu said.