Is Hupu Really Worth Only 500 Million After Peaking at 7.7 Billion? That's a Misunderstanding

By Jiaxiang Shi

The day before yesterday, Xunlei announced it had reached an agreement with Shanghai Kuanghui Internet Technology, Hupu's operator, to acquire Hupu for RMB 500 million in cash. Three months earlier, Waves had heard about this from the CEO of another sports community. We had also directly asked Hupu's current CEO, Yin Xuebin, whether he had considered acquisition as an option. He paused for five seconds before answering: no.

More than the acquisition itself, the figure of 500 million drew attention. In the first half of 2019, Hupu received a RMB 1.26 billion investment from ByteDance as it prepared for its second IPO attempt. At that time, Hupu's valuation peaked at RMB 7.7 billion. From 7.7 billion to 500 million — the old refrain that "men's spending power is worse than a dog's" was being trotted out again.

But this is actually a misreading. When Hupu made its second IPO push, it encompassed businesses beyond the community itself, including Shihuo and Lukerwang. In 2020, Hupu founder Cheng Hang told 36Kr about the company's revenue breakdown: "Advertising, e-commerce, and innovative monetization were roughly 48%, 38%, and 14% respectively."

A person with knowledge of the matter told us, "Now the community is Hupu's main business. The original Shihuo, Zaowu, and so on are no longer within Hupu's scope of operations."

And the entity Xunlei is acquiring — Shanghai Kuanghui Internet Technology — is precisely the community business. Put bluntly, the spin-off of e-commerce and other innovative businesses like Shihuo is the primary reason "Hupu" fell from 7.7 billion to 500 million. And in such a down market, taking cash rather than stock, 500 million is not unreasonable.

Additionally, Yin Xuebin told Waves that "since 2021, Hupu has been profitable and doing quite well. Revenue and traffic have both continued to grow." Despite 90% of users being male, the demographic structure has its advantages: "They're all young people, university students." Going forward, Hupu's business focus will be anchoring itself on user discussion and expression experience, working hard on product innovation, and becoming the community for mainstream male-topic discussion.

One theory holds that Hupu's repeated IPO failures were tied to an overly singular monetization model. In its 2017 prospectus, advertising revenue accounted for as much as 61%, while value-added services including e-commerce made up only 20%. A CEO at another sports community believes Hupu's users don't have sufficient stickiness — relying solely on brand advertising for monetization is simply too one-dimensional.

According to Waves' understanding, after the business spin-off, Hupu's advertising concentration has become even more extreme, reaching 90%. So much so that when Yin Xuebin asked the audience at Hupu's 20th anniversary event what they saw first upon opening Hupu, the audience quipped: "JD and Taobao."

As a community that has survived both the PC and mobile internet eras and remains active on the front lines — Tianya, from the same era, has already crumbled into the dust of history — what is more surprising about Hupu (or rather, about Cheng Hang himself) is its investment and incubation capabilities: it established Dongyu Capital and invested in several star sports projects; it internally incubated two e-commerce businesses — Dewu and Shihuo — whose value today far exceeds that of the Hupu community itself.

One way to understand it: the Hupu community is now merely one part running parallel to numerous projects like Shihuo. What may be most valuable is the founder's emotional attachment to the brand name itself.

Lanxiong Sports founder Han Mu wrote at Hupu's 18th anniversary that Cheng Hang had already intentionally kept his distance from the company — privately, he would say that "Hupu" had become his brothers' endeavor. He also said, "In the past year or two, I've heard quite a lot about Hupu being sold, but fortunately, no deal went through. Because in my view, although Hupu's profitability hasn't always been that strong, and Cheng Hang himself has cash-out needs, a company like Hupu remains 'a treasure that never runs dry.'"

Last November, Cheng Hang, who had rarely made public appearances, and co-founder Yang Bing (also founder of Dewu) came to Hupu's 20th anniversary celebration.

At the event, Cheng Hang — who believes Hupu hasn't declined because "men like being with men" — joked that they had originally invited famous stand-up comedian Yang Li, "but she said our values didn't align and refused." Yang Bing, meanwhile, reflected on the journey of founding Hupu: "There was a kind of childlike joy... In that era, social platforms still allowed you to curse at people."

Looking back, this was already the final farewell.

Image source | IC Photo

Layout | Yao Nan