The Chinese social media platform Xiaohongshu's valuation has skyrocketed to $26 billion (1,104.98 billion MYR) through a market transaction conducted by a major fund, highlighting the rapid growth of this social media newcomer as it gradually encroaches on TikTok's market position in the US.
According to Bloomberg on the 5th, this latest valuation does not come from public financing but stems from a share transaction document under GSR Ventures Management Co. The document reveals that the shares of Xiaohongshu held by the fund have been traded.
The investment portfolio report from GSR IV (Phase Four) Fund shows that the fund holds an 8.47% stake in Xiaohongshu, with Xiaohongshu accounting for 91% of the fund's total assets.
As of the end of March this year, the fund's net asset value was approximately $2.44 billion (10.37 billion MYR), of which Xiaohongshu's shares were worth $2.22 billion (9.435 billion MYR). Based on the net asset value of the fund, Xiaohongshu's valuation has soared from the previously disclosed $20 billion (849.99 billion MYR) to $26 billion.
This valuation surpasses Xiaohongshu's record during the 2021 COVID-19 pandemic period, injecting strong momentum into its highly anticipated IPO plans. The industry generally expects Xiaohongshu to potentially initiate its listing as early as this year, with specific timing depending on market trends.
However, Bloomberg's report pointed out that the valuation of unlisted companies often fluctuates significantly, as secondary market transactions are mostly completed through private negotiations.
In January this year, as TikTok faced the threat of "ban if not sold" in the US, Xiaohongshu quickly gained attention from American users as a potential alternative. At the same time, the Chinese government promised support for private enterprises and relaxed regulations on the tech industry, bringing new investment opportunities for platforms like Xiaohongshu.
Founded in 2013 by Mao Wenchao and Qu Fang, Xiaohongshu mainly generates revenue through advertising and e-commerce activities. Xiaohongshu's profits are expected to double in 2024, exceeding $1 billion (4.25 billion MYR).