Live-streaming platform Inke announced on Sunday that it acquired interest-based social app Jimu for $85 million.
Why it’s important: The Chinese live-streaming market has been losing out to short videos in capturing user time spent since 2018, and analysts expect the industry to further consolidate in 2019. The Jimu acquisition helps Inke branch off into the stranger-socializing market and expand into revenue streams untapped by its current business model.
- According to Chinese media reports, Jimu does not advertise and by word of mouth has acquired 12 million users, most of whom are young—born between 1995 and 2005—and live overseas or in top-tier cities, signaling high spending potential.
- Jimu will continue to be operated by its original team after the acquisition.
“Jimu and Inke have relatively separate user bases, and the two apps can complement each other. Young users on Jimu are passionate about trends, sharing, and socializing, and are willing to pay for high-quality lifestyles. They are going to provide a powerful drive for Inke’s growth.“
—Inke in its filing to the Hong Kong Stock Exchange (our translation)
Details: Founded in 2015, Inke listed on the Hong Kong Stock Exchange in July 2018. Its monthly active users recovered 12.3% year-on-year to 25.5 million in 2018, though falling well short of its 30 million peak in 2016. Inke recorded RMB 17.7 in net losses in 2018 and is expected to book a net loss of no more than RMB 60.0 million for the first half of 2019.
- Inke is advertised on its Apple App Store page as a platform where users can find good-looking friends.
- Jimu also says it is a social app for users to connect with good-looking and funny strangers.
