(Bloomberg)—Kuaishou Technology showcased a scorching pace of growth in its first results since a $5.4 billion initial public offering, thanks to a surge in online shopping revenue.
The TikTok-like video service that pulled off the biggest technology IPO since Uber Technologies Inc.’s reported a 50% climb in 2020 revenue to 58.8 billion yuan ($9 billion), slightly ahead of analysts’ projections. Much of that stemmed from a doubling in online advertising in the December quarter as well as a several-fold surge in ecommerce from a low base. It posted a net loss for the three months of 19.3 billion yuan ($2.96 billion)—exceeding revenues in part because of fair value changes in preferred shares—versus 18 billion yuan ($2.76 billion) a year earlier.
Kuaishou, the nine-year-old operator of China’s most popular short-video service after ByteDance Ltd.’s Douyin, is trying to establish its place among a generation of mega-startups like food delivery giant Meituan and ride-hailing leader Didi Chuxing. Backed by Tencent Holdings Ltd., the startup’s February coming-out party in Hong Kong was the second-best debut ever for an IPO that raised more than $1 billion.
The social media giant is counting on new ventures such as retail to help sustain its pace of growth over the longer term, despite competition from ByteDance and others exploring social commerce. Founded by former Google employee Su Hua and Cheng Yixiao as an app built around sharing animated GIF images, Kuaishou pivoted to short video in 2013 and added livestreaming in 2016, landing footholds in what eventually became two of the hottest social media formats. Its shares slid 4% Tuesday ahead of the results but are still more than double their IPO price.Favorite