The investment momentum of Station B has risen: games, celebrities, film and television companies, all have to buy

Source: IT Orange (itjuzi521)

Author: Li Xinxin Editor: Judy

Like most Internet companies, Bilibili's own growth path is inseparable from investment support.

Data included in IT Orange shows that Bilibili has received 11 rounds of funding as of March 31, 2022. In particular, after 2018, Bilibili's financing amount has continued to expand, not only receiving US$300 million from capital investments such as Tencent in October 2018, but also US$400 million from Sony in April 2020, in addition to Raising HK$20.1 billion in 2021.

Bilibili, which has become a listed company, has long been unable to relegate to the small corner of the "two-dimensional video platform", and it has been urgently looking for a wider and diversified ecological content, crowds, and revenue methods in recent years.

On the other hand, since its listing on the U.S. stock market in 2018, Bilibili has been in a development dilemma of increasing revenue and not increasing profits for 4 consecutive years. Although the annual revenue has been in a growth trend, the loss has been expanding, and the loss has reached 11.6 billion yuan in 4 years. Not only that, Bilibili has a gap with Aiyouteng in the field of long video, and it is difficult to compete with Douyin and Kuaishou in the field of short video, and it is not inferior to Huya and Douyu in terms of game live broadcasting. Under such circumstances, Bilibili needs to strengthen its business development through investment so as not to be left behind in the competition.

The following IT Orange will make a brief analysis of Bilibili's outbound equity investment mergers and acquisitions based on public investment events.

1

More active and diversified investment shots

In the competition in the field of long video, Bilibili, who comes from a two-dimensional niche culture, may not be able to compete with "Aiyouteng" for the time being, but in the field of foreign investment, Bilibili, which has frequently shot in recent years, has become an active "veteran" of investment activities second only to Tencent.

According to IT Orange data, as of March 31, 2022, the total number of bilibili foreign investments has reached 159. Since the first investment began in 2013, Bilibili has gradually increased its emphasis on investment in the following years, making 56 investments in 2021, setting a new record of 25 investment events in the previous year. Not only that, but in the first quarter of 2022 alone, Bilibili has invested 10 times – keep in mind that the amount of investment is more than the number of annual investments in previous years.

From the perspective of investment rounds, nearly 40% of Bilibili's investment is strategic investment, followed by A series investment accounting for 24.8%, seed angel round investment of 14.6%, it can be seen that Bilibili prefers early investment.

In addition, Bilibili has also participated in the post-IPO financing of 4 companies, namely entertainment media company Huanxi Media, Palm Reading Technology and game company CMGE Mobile Games and Heartbeat Games. Specifically, Bilibili acquired a stake of HK$513 million in August 2020, holding 9.9% of Huanxi Media; in February 2021, Bilibili participated in the non-public offering of ordinary shares of Palm Reading Technology, subscribing for a total of 1785714 shares for a total investment of RMB50 million; on April 11, 2021, it invested HK$960 million in a strategic investment in Xinxin Company, holding about 4.72% of the shares of Xinxin Company; and on April 29, 2021, it subscribed for 198 million shares of Zhongma games in HK$650 million. After subscription, Bilibili holds a 7.15% stake in CM MOBILE. Whether it is a game company or an entertainment company, Bilibili wants to continuously consolidate its moat by participating in more potential companies.

Bilibili, which has always been jokingly called "walking on one leg", has deliberately adjusted its investment direction in recent years and continuously broadened its investment boundaries.

IT Orange maps the proportion of its investment in various industries over the years based on the industry distribution of Bilibili investment events. As can be seen from the above chart, in the early 2013-2018, Bilibili's investment in the game and entertainment media industry accounted for more than 90%, but after 2019, the proportion of investment events in these two industries has dropped significantly, especially in 2020 and 2021, the proportion has dropped to about 70%. At the same time, new investments have been added in enterprise services, e-commerce retail, advertising and marketing, meta-universe and other industries.

Although Bilibili is known as a video communication platform, games have always supported the heavy responsibility of Bilibili's revenue, and from 2015 to 2018, the company's game revenue accounted for 65.7%, 65.4%, 83.4% and 71.1% of total revenue, respectively.

However, with the listing of Bilibili on the NASDAQ in the United States in 2018, the "one-legged walking" model that relies on game development has been continuously questioned by the public, and by 2020, the game has been strongly regulated by the state, so under the influence of subjective and objective factors, Bilibili has opened its own diversified development path. Therefore, in the period of 2020-2021, we can see bilibili's investment is richer and more diversified than in previous years, and it has increased its investment in other areas such as local life and corporate services.

2

HK$513 million in Huanxi Media, investing heavily in 9 film and television companies

It can be seen from the proportion of industry investment in Bilibili over the years that entertainment media has always been the focus of Bilibili's investment layout. According to the data included in IT Orange, as of March 31, 2022, Bilibili invested in the entertainment and media industry 92 times, accounting for 58% of all investment events. Among them, film and television companies have always been the focus of Bilibili.

IT Orange data shows that as of March 31, 2022, Bilibili has invested in a total of 9 film and television companies, involving movies and TV series, documentaries and other aspects. The investment includes the hidden shadow culture that produced "I Repair Cultural Relics in the Forbidden City", the Tianya culture that participated in the production of "Mermaid", and the free whale that produced "Embroidered Spring Knife" and other film and television companies with representative works.

Among them, Bilibili acquired a stake of HK$513 million in August 2020 and became its shareholder. It is understood that Huanxi Media was co-founded by Dong Ping, Ning Hao, Xu Zheng and Xiang Shaokun in 2015, and produced films such as "My Motherland and Me", "I Am Not a Medicine God", "Tai Yuan" and so on. After the two sides reach a cooperation, Bilibili will obtain the exclusive external broadcast rights of existing film and television works and new works under Huanxi Media, and the two sides will seek more cooperation opportunities in the fields of movies and TV series in the future.

It is worth noting that the relevant rounds of these 9 film and television companies invested by Bilibili are all independent investments. For Bilibili, who wants to "break the circle" and "get out of the circle", investing in these film and television companies has become the only way for the development of video platforms. For a long time, Bilibili has always lacked "confidence" in the competition with Aiyouteng, these three have money and capital to buy copyrights and do self-made programs, while Bilibili in addition to the two-dimensional animation culture, how to come up with more types of content works to retain other audiences is a problem. Therefore, Bilibili began to increase the construction of its own content, invest in film and television companies and cooperate with them to enrich its own content city. For example, through investment in Huanxi Media, Station B won the exclusive broadcast rights of the TV series "The Sky of the Wind Dog Boy", which added a lot of members and popularity to itself.

3

Fight against watermelon video, grab the UP master, and invest in MCN company

High-quality creators and wonderful high-quality content are crucial to the development of Bilibili, which not only involves the market of the young group behind it, but also affects the construction of its own content richness. In addition to investing in film and television companies, the MCN company behind the influencers is equally important to Bilibili.

In 2020, many millions of bilibili fans UP mainly chose to bid farewell to bilibili in the face of benefits such as tens of millions of signing fees and traffic support given by watermelon video - for example, the former B station UP master wizard Finance, Ao Factory Director, Huanong Brothers, Li Yongle teacher and so on chose to run to the embrace of watermelon video. This has had a considerable impact on Bilibili, which has increased its incentives for creators on the one hand and begun to invest in MCN on the other.

As of March 31, 2022, Bilibili has invested in 8 MCN companies. Among them, Bilibili has the largest number of investments in 2020, including Hanqing Media behind the B station's nearly 10 million fans UP main "Jing Hanqing", B station millions of fans UP main "IC Lab" behind the light company, and the red man to build the company Qingteng Culture and Wufeng Technology. At the beginning of 2022, Bilibili invested in the company behind the well-known UP master "Crooked Nut Research Association" and "Eclipse" of Station B.

Bilibili may also realize that it may face the danger of being "dug into the wall" in the future, as early as 2014, it established super electric culture communication company (formerly known as Bilibili Culture Company), the legal representative is Bilibili CEO Chen Rui, whose business covers UP main brokerage, IP derivative and brand cooperation, cultural theme comic exhibition, etc., and classifies heavyweight fans SUCH as B station "Cool Wind Kaze", "China BOY Super Gorilla", "A Phantom King", "Runaway Man" and other heavyweight fans UP as their own doors. It is reported that super electric culture exclusively signed UP master 200+ people.

4

Spent $1.5 billion a month on 3 game companies

As we all know, games have supported most of Bilibili's revenue, and even in 2017, game revenue accounted for as much as 83%. During this period, Bilibili continued to invest in games, becoming Bilibili's second most popular investment industry after entertainment media. According to IT Orange data, as of March 31, 2022, Bilibili has invested 39 times in the gaming sector, accounting for 24% of all investment events. Among them, in 2021, Bilibili invested 21 times in the game, becoming the year with the most investment in games.

Although Bilibili intends to get rid of its dependence on games, its revenue ratio has also declined since 2019, but as the proportion of games to revenue has decreased, losses have continued to increase - Bilibili's net profit in 2018-2020 was -552 million, -1.289 billion and -3.012 billion, respectively. As bilibili's revenue "cash cow" game, it has become the key to its contraction of losses, so Bilibili has turned around and invested heavily in the game layout, frequently selling in 2021 and creating a new record of 21 times.

In April 2021, Bilibili subscribed for 22.66 million shares of Heartbeat Company, involving HK$960 million, accounting for 4.72%; also in April, Bilibili subscribed for 101 million yuan for celadon games, and injected 101 million yuan into it a month later, eventually holding 4.99%. Not only that, but Bilibili also subscribed for 198 million shares of CMG for HK$650 million in April, holding 7.15% of the equity of CMG, and Bilibili invested 1.5 billion yuan in the game in just one month.

In addition, Bilibili also strategically invested in other game companies in 2021, becoming the second largest shareholder of several companies. It is worth noting that in the face of strong opponents such as Tencent and NetEase in the domestic game market, Bilibili has also begun to lay out the overseas game market. IT Orange data shows that in August 2020, Bilibili invested tens of millions of yuan in overseas game development and distribution of the month of the film, it is reported that the company has a game studio "Shadow Moon Game Studio", the current studio has two games: "Shepherd's Heart" and "Star STARLIKE".

5

Chasing stars in the meta-universe, vigorously investing in virtual idol companies

Riding on the east wind of the meta-universe, plus virtual characters such as Luo Tianyi burst into flames, the popularity of virtual idols continues to heat up. Douyin has beauty master Liu Yexi, Ali to create a virtual idol AYAYI, Tencent's QQ dance game also launched a virtual idol "Star Pupil"... As an important communication platform for the two-dimensional culture, Bilibili has accelerated its investment in virtual idol companies.

IT Orange data shows that as early as 2016, Bilibili invested in Chinese virtual singer operator Henian Technology. The company operates virtual representatives such as Luo Tianyi and Yan He, who have since been featured on various David TV platforms and held concerts, and Bilibili not only invested in the development of new machines, but then acquired the company in 2019. In 2017, Bilibili invested 10 million yuan in the virtual idol platform MUTA Youta Animation, the company's representative of the virtual character is "Yan Xi"; in 2018, Bilibili invested 47.33 million yuan to invest in the secondary IP operator Zelishi, in fact, the company's wholly-owned subsidiary was Henian Technology, which is currently Chinese the holder of the most popular virtual idol Luo Tianyi image. In addition, Bilibili invested in XR and lategra, a provider of digital virtual performance solutions, in 2020, and acquired a new type of Internet company of virtual idols, Qianyu Network, in 2022.

Chen Rui, chairman and CEO of Bilibili, has high expectations for virtual idols, and he has publicly stated that virtual idol culture will usher in an explosive period. In the face of the risk of real idols often "collapsing", the virtual idol of "never collapsing" is sought after, under the wind of the meta-universe, Bilibili may invest in more virtual idol companies in the future to promote the prosperity of the Bilibili community content ecology.

6

"Cast a wide net, catch more fish"

In addition to investing heavily in entertainment media and game companies, Bilibili, which wants to "walk on multiple legs", has begun to lay out in other areas, and it is clear that Bilibili has invested in a number of e-commerce retail companies.

IT Orange data shows that in 2021, Bilibili invested in 5 e-commerce retail companies, involving clothing, food and beverage, beauty care and other fields. For example, in 2021, Bilibili invested in the chain coffee brand SEngine Yingji Coffee twice in a row. It is reported that the company began to launch boutique instant coffee products and sell them online in 2019, and its monthly sales increased by 10 times in the six months of going online. Bilibili's casual fashion brand bosie, which was previously established with a total sales of more than 100 million yuan in one year, is the fastest growing new brand in the history of the Amoy men's wear industry, with sales from 0 to 10 million in only 6 months.

But Bilibili's entry into e-commerce is not a move only in 2021, IT orange data shows that In August 2020, Bilibili acquired the cross-platform KOL e-commerce platform Boromi. Some media disclosed that in fact, in May 2020, Bilibili began to test live with goods. In the context of Douyin and Kuaishou vigorously promoting e-commerce live broadcasting, Bilibili, which has been relying on advertising to monetize, sees new hope. In addition, from the perspective of the investment track, whether it is Hanfu, coffee or fashion clothing, the embrace behind it is also the young group market, which is consistent with the target population of Bilibili.

The entry into the e-commerce industry is only part of Bilibili's diversified development, and Bilibili has also extended its hand to other areas. IT Orange data shows that since 2019, Bilibili has invested in pet owners and pet lovers online communication community Doulu Technology, mobile communication service provider China Telecom, intelligent pure electric vehicle brand Krypton Intelligence and other companies, covering social networks, auto transportation, catering and other industries.

In addition to "logic", Bilibili also has some cross-border investments, such as investing in smart electric vehicles, krypton intelligence, participating in investment in China Telecom, photo cloud storage software pocket baby, weight loss recording tool weight small book, Hamburg Western food chain pink burger, news review integration website observer network, etc. Of course, the acquisition of a payment service provider can be considered a necessary capability and the only way for all companies to grow.