YouTube and Bilibili is the dominant video platform around the world generating close to 20 billion dollars for Google in 2020. In comparison, the UT of china Bilibili is more than 13 times smaller than YouTube currently but does this company have the potential to become as big as YouTube let’s explore its history its business and its future together.
What is Bilibili?
Bilibili is the 50 billion us dollar company listed on Nasdaq the company is the video platform in China where anyone can upload their own videos we talk about the big 3 Netflix live video platform of china yooku Tencent’s video. Yet the history of Bilibili is a story worth explaining Bilibili started as a niche platform for the ACG community in China. ACG meaning anime comic and games the story of Bilibili starts back in 2007. The year was 2007 and there was no major platform delegated for anime fans so someone by the name of ceiling created one as a hobby project calling it ac fun it is also known as station a for many of their users at first it was just a fun project to create a community of like-minded people like him.
How BIlibili Community Growth
However, as the community grew the financial stress on the ceiling grows as well at the time he was still a student although the minimum cost of maintaining the website was just a few thousand dollars riming me for a student there is still a sizable expense ceiling struggle to maintain the website, and it often suffers crashes and outages sometimes for months. To solve this issue some power users in AcFun decided to create a mirror website to help AcFun communities who have been left out with no platform to visit during these outages the leader of this group is someone by the name of Xu Yi, and they created the website Miku fans the original idea was never to compete with AcFun but rather to act as a backup site for the community but AcFun continues to struggle to keep the site up more and more people. Started joining Miku fans instead later on shiny and his friends switched the name of Miku fans to BIlibil and more commonly known to his user as station b at this point we have established that ac fund is far from perfect but because the ACG culture in China was booming the struggle at AcFun did not stop it from growing.
Fortunately, AcFun was able to sort out his issue and both platforms grew together but as the user interface and user experience or BIlibili was much better than AcFun many high-profile creators started shifting more of their content to BIlibili this was another step for BIlibili to become a sustainable platform on its own by 2010 the founder of AcFun made a major decision ceiling maybe being frustrated with all the issue of AcFun or maybe because of office politics decided to sell off AcFun for 4 million renminbi and wash his hands off the platform ceiling sole HD fun to two top managers from Shandar group a key gaming company in China at the time the change in management gave AcFun a period more stable growth after that at the same time BIlibili was still a struggling hobby project BIlibili website was not even registered as a company.
Founder Of BIlibili
The BIlibili founder is shiny while attending university in Hangzhou travelled to Beijing to look for funding from venture capitalists, unfortunately, he met with no afternoon basically no VCs believed in the vision for BIlibili shinny gave up and decided to bootstrap the development.
At that point, BIlibili was only generating income from advertising, but the income was far less than the operating cost of the website which can be above a hundred thousand remedy a month that is a major cash burden for shiny luckily he came from a wealthy family, so he continued to seek his family help to sustain BIlibili but that will all change with the appearance of enriching the current chairman and CEO of BIlibili Chen ray is a massive anime and comic fan, but he is also a veteran in the Chinese tech space.
Career at kingsoff
He started his career at kingsoff in 2001 one of the leading software company in China. He grew through the ranks and worked directly under then CEO legit when leyjin retired from kingsoff Chenery went on to start baker internet securities where he was the CEO of the company from 2008 to 2010. Baker was later acquired by kingsoff and merged with another subsidiary the combined company was later renamed China mobile is now a listed company on the New York Stock Exchange and is also a listed subsidiary of king soft so before chenrei came into contact with BIlibili he was already an established tech entrepreneur in China but luckily for BIlibili Chen ray was also an avid anime fan he has been actively watching the development of BIlibili.
Generally then reached out to srini via email and flew to Hangzhou to meet the founder multiple times he indicated to srini that he was very interested to become an investor. However, after srini’s experience with VC in Beijing, he was very skeptical of bringing in an investor, so initially he rejected the investment but as BIlibili grew the need to upgrade its infrastructure became more urgent. He accepted the investment from the training rate making him his angel investor Chen ray also continued to help BIlibili as a consultant he advised Ginny to implement many new features during this period with the help of Chen ray and his investment BIlibili was finally turning a corner and by 2013. VC started noticing the potential of ac fund and bilibili in particular IDG china one of the largest VC in the country came knocking on the door of ac fund IDG is an established name in the VC circle in China have invested in multiple unicorns like 10 cents Maidan Baidu and Xiaomi IDG wanted to invest in AcFun but AcFun was going through a change in business focus then instead of focusing on building the ACG community as a creator platform the top management was turning the attention to live-streaming in particular gaming live-streaming so seeing that their philosophy was different from IDG AcFun top management rejected the investment from IDG, but they actually introduced them to believe it IDG then invested about 4.5 million us dollars in AcFun as a series an investor once AcFun got the investment generally went back to ac fund to propose a merger between the two stations as AcFun management was more interested to go into game live-streaming they were eager to sell off AcFun as well.
AcFun Selling Story
However before they can finalize the deal another injured investor chai tong Ching the founder of the alpha group started approaching AcFun as well the alpha group is an animation and toy company, in the end, AcFun was more interested in the deal proposed by the alpha group, so they decided to sell AcFun to chai dong Xing the deal was that chai will allow them to spin off the game streaming business from AcFun. The previous owner of ac fund spun it off and renamed it and yes, so you went on to list on Nasdaq and became one of the largest live-streaming platforms in China today toyu is in the midst of a merger with his main rival huia the deal also marks the beginning of the end for AcFun to China. Don’t think AcFun is just a small investment for the alpha group, so he never put too much attention to it very soon they bought in additional investors into AcFun after a few years of operation AcFun fell into a lawsuit with yuku tudo for using its content the case ballooned to a criminal case and some management of AcFun even went to jail for it.
However, by 2015 yuku tudo emerged as 18 shareholders of ac fund after investing 50 million U.S. dollars, but there were also rumours that the equity stake was the result of compensation for the lawsuit I cannot confirm which story is true, but the point is yukutudo was added into AcFun’s growing list of shareholders and after yuku tudo was acquired by Alibaba Group in the same year AcFun managed to get an investment from SoftBank as well all this resulted in multiple major shareholders within AcFun all fighting for control and this created chaos in the management of AcFun and changing CEO become the norm for AcFun.
BIlibil full time
On the other hand, cheneray finally joined BIlibil full time in 2014 and that marks the start of the ultra growth era for BIlibil with his experience he grew believably steadily and gotten investment from other VCs and even 10 cents holding January also ensured that billy obtained all the necessary licenses to operate so that it will not fall into the same trouble as AcFun by 2018 he successfully led BIlibil to a listing on Nasdaq and even attracted Alibaba to start acquiring an eight percent stake in BIlibil in 2019 this make BIlibil one of the few companies that Alibaba and Tencent have both co-invested in today BIlibil is generating revenue in four ways it produced and published a game for its user.
BIlibil membership & BIlibil live to broadcast
It also has many value-added services like BIlibil membership pay to view or BIlibil live broadcasting this is actually the fastest-growing segment for BIlibil thirdly it still has a strong advertising business and lastly is growing its e-commerce business with a partnership with Taobao in the last 12 months it has a revenue of 10 billion renminbi which has been growing 135 a year over the past three years as the platform is monthly active user has also been growing impressively currently there are 197 million monthly active users on the platform more than doubled from two years ago.
BIlibil video entertainment in China and Income
However, given the strong competition for video entertainment in China the company is far from profitable it made a net loss of 2.6 billion remember in the last 12 months it might be years before it reached profitability, but the good thing is that the company has a very strong balance sheet with more than 14 billion in cash the company is also in the net cash position at the core of it the key to a sustainable and strong platform is having a strong creator community in the last quarter it has more than 1.7 million active creators which are up 51 from last year.
BIlibil creators community Vs. YouTube Creator Community
BIlibil has one of the strongest creators’ community as a platform something they had since the very beginning, although BIlibil might not follow the business roadmap of YouTube its strong community will be the key to its success in the long run and after seeing the success of other platforms like YouTube WeChat and Weibo. I do feel that the best might be yet to come for BIlibil, although I do not own this company now BIlibil is certainly one I’m considering, so that’s the story of BIlibil over the past 14 years are you a user of BIlibil share your experience with us below.