Sing Chen Hua: The valuation after Series D financing is 4.3 billion yuan Will deeply cooperate with Super Girl

It is not only an Internet concept company that is sought after in the primary market, but also has a fashionable O2O operation model, and the number of users reaches 220 million. With these conditions, after Series D financing, the overall valuation of Sing Bar has exceeded 4.3 billion yuan.

Author: (Gao Qingxiu)

Source: Entertainment Das Kapital (WeChat: yulezibenlun)

Introduction: Entertainment Das Kapital is the only official WeChat account in China jointly operated by financial journalists and entertainment journalists. Focus on cross-border thinking collisions between the entertainment and financial worlds.

Original title: Chen Hua: Series D is estimated at 4.3 billion yuan. It once planned to acquire Wanda KTV. How big is the appetite of singing bar?

"I have a lot of amazing people in my circle of friends, a lot of various listed companies, and a lot of big shots in the capital circle. I don't say a word. Who knew I was thinking about going public?" In an interview a few days ago, Chen Hua explained to reporters his original intention of looking for a shell in the circle of friends.

After this circle of friends, some media outlets revealed that the work of dismantling the VIE architecture of the singing bar is nearing completion. On the surface, this series of actions seems to convey a signal that Sing Bar is in a hurry to return to China to go public, and may land on the A-share GEM through a backdoor approach.

However, the strategy formulated by Chen Huawei's Sing Bar is exactly the opposite of the outside interpretation. He prefers to approach the company's listing path with a casual attitude: "How to choose is not such a difficult question. In addition to the GEM and the New Third Board, the future strategic emerging board will also work. Anyway, we're not in a hurry. Let's watch while walking. If there is a cheaper one and there is no gambling agreement, we'll borrow a shell. If there is no suitable one, we'll wait another year or two."

An important reason from the time it went public in the United States to the time it returned to China to open the VIE is the lack of similar benchmarking standards in the United States, resulting in a low valuation of Sing Bar and a large gap between the valuation of domestic Internet companies.

At present, Sing Bar's business is mainly divided into four major sectors. There are mainly singing bar APP and singing bar live broadcast rooms online, and offline there are singing bar Maisong KTV, as well as hardware microphones.

However, in Chen Hua's view, unlike online music platforms such as YY and 9158, the singing bar APP is mainly community operations and does not make money. The singing bar live broadcast room of the APP that can make money seems to have a small number of users. Perhaps the most noteworthy one is offline KTV. At a time when the entire KTV industry is declining, Sing Bar not only opens a large-scale KTV physical store and establishes an offline stage at Beijing 268 Music Industry Base, but also intends to acquire Wanda KTV Chain store.

According to this product layout, even if it is brought back to China, there is still a lack of benchmarking, but this has become the reason why Sing Bar has achieved a high valuation in China.

It is not only an Internet concept company that is sought after in the primary market, but also has a fashionable O2O operation model, and the number of users reaches 220 million. With these conditions, after Series D financing, the overall valuation of Sing Bar has exceeded 4.3 billion yuan.

What is curious is that compared with other online music apps in the industry, what is the logic behind the financing and layout of this Internet company with a valuation of 4.3 billion yuan?

There is also a lack of benchmarking. The valuation in the United States is low, and the domestic valuation is as high as 4.3 billion

yuan. With the activity of Internet concept stocks in the domestic primary and secondary markets, starting from June this year, a large number of Internet companies listed in the United States have begun to return to China. Listing, Sing Bar is also a member of this wave of return.

At first, the reason why I wanted to go public in the United States was based on the consideration of making products."Because there are not so many hidden rules abroad, it does not care about what stories you have had, only about your financial data and whether your products are well made. good."

But later it was discovered that there was no daily habit of using this product abroad, and there was a lack of corresponding benchmarking products on the market. Moreover, if Sing Bar was listed in the United States, just like Facebook was listed in China, American investors might not recognize our way of playing. "

But when Chen Hua made the decision to" return home "at the beginning of this year, it was unanimously opposed by the board of directors, especially investors in US dollar funds. "As soon as I mentioned breaking down the VIE, those US dollar colleagues became nervous one by one. Some said that their fund had never encountered such a thing, which would lead to mistrust of their funds in the industry."

An important reason why Chen Hua insisted on letting singing bars "return to China" to develop is that in the United States, singing bars have a very low valuation due to the lack of similar products to benchmark.

"Foreign valuations depend on income and profits, and will not give more. But in China, during market expansion, there can be no profits. As long as there is huge room for profit growth, the valuation can be raised, so that it can be raised in the market. A lot of money."

However, the structure of the VIE established before listing in the United States was a character that "it is easy to ask God but difficult to send God away." The process of eliminating VIEs began in August this year and has not ended yet. In order to "send away" US dollar funds, Sing Bar also launched a new round of financing.

This is considered a Series D financing from Sing Bar, totaling 873 million yuan. Among them, Zhongnan Heavy Industry, Mango Media and Happy Buy plan to jointly initiate the establishment of Mango Yingtong with an investment of 417 million yuan; Hualian Co., Ltd., Shanghai Changrui and other parties jointly initiate the establishment of Shanghai Xinpan Cultural Investment Center with an investment of 446 million yuan; Huaying Investment invested 10 million yuan, transferred Changba Limited to hold part of Beijing Toutao's equity and increase capital to it. Based on the transaction price, after this round of financing, the valuation of Sing Bar reached 4.3 billion yuan.

In a market that lacks pure music labels, the singing bar with a valuation of 4.3 billion yuan is obviously eye-catching.

A securities analyst told reporters that a more likely reason is that this valuation is based on the number of users and traffic in the primary market, rather than the price-to-earnings ratio of the secondary market.

Compared with online shows, Sing Bar has a different way to play.

Currently, Sing Bar products have a cumulative number of activated users of 223 million times, with 81.45 million registered users, 30.23 million active users, and the average number of daily active users is 4.36 million. This is the basis that supports the valuation of 4.3 billion yuan. These users mainly come from two major online products: Sing Bar and Sing Bar Live Room apps.

Different from online music platform apps such as YY, 9518, and National K Songs in the industry, Sing Bar is not a type of online music show.

In Chen Hua's view, singing bar is completely a community for karaoke lovers. In this space, the platform and singers do not sign contracts, give money, and do not earn money from the singers. It is just a community for making friends.

"It's not a performance, but a place to show off. So, that is to say, because the money factor in our entire singing bar is very small, and unlike ordinary shows, the most people in the singing bar are male singers. The audience is mainly female, so the whole community is very clean."

Since the singing bar "does not emphasize" the money element and mainly focuses on the community, the payment rate is relatively low. But if you want to make money, you can go to the live broadcast room of the singing bar.

The two APP accounts of Sing Bar and Sing Bar Live Room are unified, but Sing Bar Live Room is a live room APP independent of Sing Bar. It is similar to the operation of current shows such as YY.

During the interview, Chen Hua held his mobile phone and showed to reporters: "So far, the total number of registrations has only been more than 1 million. There is also an entrance to this APP on the Sing Bar page, but it is relatively hidden. Therefore, we do not rely on Sing Bar to guide the live broadcast room APP diversion.

We will recommend some celebrities in the bar community who want to make money to the bar live broadcast room, where the current highest-paid host can get more than 1 million yuan a month. "

In order to distinguish the gameplay of other online music apps, the singing bar live broadcast room is gradually becoming a live broadcast channel with music attributes. Some small bands, celebrities, and celebrities in the singing bar are very willing to interact with their fans in the singing bar live room.

But in addition to online, offline interactive stages have now been added. Sing Bar cooperated with 268 Music Base to establish an offline stage in Beijing Cultural City. "There are many programs you can do on this big stage. For example, last time, Wu Mochou came over and she sang on the stage. She could choose a few people to interact with and draw a lottery. Or at this scene, she had some fans on the stage to play a game." Chen Hua said.

He barbaric expanded offline KTV and also cooperated with "Super Girl" and "Star Dance Asia".

Among all the online and offline products of the singing bar, Chen Hua is most proud of the offline singing bar Maisong KTV. At present, there are already 11 stores have opened, and about 30 to 40 stores are under renovation. It is planned to open one to two hundred stores next year, and strive to open 2000 offline KTV stores within five years. "Offline expansion is very fast, and every store I often open is profitable in the month."

With the advent of the legalization of music copyright and the high costs of KTV, offline KTV has suffered large-scale losses. Wanda even closed its more than 90 self-operated KTV companies to cut off the unprofitable sectors of the group.

However, when the entire industry was declining, Sing Bar did the opposite and comprehensively expanded its offline KTV business in a recursive manner. You can even make money in industries that seem to be sunset.

In Chen Hua's view, some traditional TKV stores have a very large investment, 50 million yuan per store, and including management costs, one to two hundred waiters per store. This way, the overall operating efficiency is very low. Therefore, there are no characteristics in the entire product, and the management concept is not modern.

"It was almost half a year since we started doing KTV in June last year. Wanda has been communicating with us and wants to sell it to us, but we don't want it because we have our own way of playing."

Chen Hua previously revealed that different from the way of playing large KTVs, singing bars have to follow the route of mini KTV. Each store has about 20 rooms and pursues a high room replacement rate. "We will make a small stage like a big stage in each room, with lights, smoke, and sound, and in the future we will add cameras and these scenes will be transmitted directly online."

For newly opened stores, Sing Bar mainly uses crowdfunding to raise funds, and the cost of each newly opened store is about 3 million yuan. "Singing Bar offline KTV crowdfunding is conditional. It must be users who live nearby and let these users become shareholders, so that they will bring friends here every day to spend, and the operating efficiency is much higher than other KTV's.

Moreover, such small private rooms and KTVs established through crowdfunding can achieve profits in the same month in most cases. "Chen Hua said.

In addition to expanding KTV, Sing Bar also cooperates with Hunan Satellite TV and other TV stations. Because the star-making mechanism of Sing Bar is similar to today's "Super Girls". Therefore, in next year's Super Girl, Sing Bar will have in-depth cooperation with Hunan Satellite TV.

It may become a very important recruitment channel for participating in Super Girl. At the same time, it may participate in some gameplay methods, including the final finals, where it may also be a broadcast of Guangzhou and Taiwan.

In the future, Sing Bar will focus on the upstream and downstream layout of the audio industry, hoping that every business line will form a linkage.

Note: This article has been deleted based on the original text.

Editor: yvonne