This article is from WeChat official account:Phoenix WEEKLY Finance (ID: fhzkzk) , author: An Qi, editor: Zhang Yixiao, head picture from: Visual China
Recently, the smart social software Soul, which has just submitted its prospectus to the US Securities and Exchange Commission, has once again appeared on the cusp of public opinion.
In May, Soul was involved in a “killing pig pan” fraud. According to the police report, criminals used software such as Momo and Soul to accurately identify single women between 30 and 50 years old, and then transferred them. Go to an app frequently used by government officials to chat and talk, and then induce the woman to recharge money in a fraudulent app. After the woman invests a large amount of money into the app, the scammer sets up complex withdrawal requirements or shuts down the platform directly disappear.
An app advertised as “Soul Social Software” has become the starting point for the search for “killing pigs” objects, which makes the outside world have doubts about Soul’s positioning. For a long time, the intelligent social software Soul has always separated its “personal settings” from online dating software such as Momo. It claims that its positioning is not “dating software”. The company’s mission is to establish a “soul social element”. Universe”.
“Our mobile apps may be confused with social mobile apps for the online dating market. Potential users misunderstand that our mobile apps are used only or mainly as a tool for starting romantic relationships with strangers.” Soul in It is said in the prospectus.
Soul was launched in China in 2016. Its slogan is “Anonymous soul chat, looking for your soul mate”. It focuses on the private chat experience in daily life scenes, through the “Don’t look at your face” Promote the deep accumulation of relationships and let users taste the freshness.
2021 is the fifth year that Soul has been online. In the past five years, some people regard Soul as a “clear stream” in social software, and some people regard Soul as a “dating artifact” At the moment when the market reputation is polarized, Soul is also “swaying left and right”, thinking about which one is its way to break through in the market.
Rejected the value of the face, but ultimately lost to Kanface
Many people may not have downloaded Soul, but they must have had the common experience of being swiped by Soul ads on Zhihu, Douban, NetEase Cloud, Douyin and even variety shows. The people on the screen repeatedly questioned: If you don’t look at your identity and age, but only rely on your interest and three views, what kind of soul confidant would you meet? Do you want to find your soul mate?
Soul at that time was called a tree hole. There are niche art workers, students who work early in the morning, and post-95s who fall in love with their roommates. Everyone talks to themselves and secretly looks at the life of a stranger. Everyone has a lingering sense of loneliness and desire to talk, but they are ashamed to tell their acquaintances. Soul satisfies this point: The sociality is not strong and there are no acquaintances; the square is decentralized, everyone can speak freely, and have feedback; there is no face and location, so don’t worry about being harassed.
The so-called “Soul Mate” has become an important “personal design” for Soul to break through in the market.
The platform sets up the soul self-test game. When users register for the first time, they need to complete the test in the form of choosing one of two or one of three before they can officially enter the App. Then, users are assigned to different planets according to age, personality, hobbies, and lifestyle, matching the most similar friends. The more tests completed, the more accurate the results, and the greater the chance of matching a soulmate.
In addition to the “soul” setting, Soul had one of the most out-of-circle design in the early years of complete anonymity. The platform does not allow the use of real person avatars, and can only use the pinch face function provided by the system to set virtual avatars. LBS positioning (mobile base station positioning) was cancelled. Refusing to look at the face, unable to locate, and ultimately completely insulated from acquaintances and intra-city social interactions
While meeting the social needs, it also cuts off the interference of sexual harassment, and has accumulated a considerable number of high-quality users for Soul.
Before and after the launch of Soul, investors had predicted that it would not be possible to exceed 100,000 DAU(daily active users) in the future. This prediction was quickly beaten in the face. In November 2016, through the invitation of similar platforms such as Douban and Zhihu, Soul immediately had 200,000 registered users as soon as it went online.
The accumulation of users makes the server crash from time to time. Until the beginning of 2018, some users discovered that Soul, who was once poor and white, had money to update its servers.
At that time, Soul had just received Series B financing from DST. DST has invested in Facebook, Snapchat, Tantan, Maimai, and is regarded as one of the world’s most social investment institutions.
But the old users found that Soul with money started to “look at the face”.
On the updated Soul App, face value and video matching items have been added, which blurs the original faceless setting. LBS function is enabled, same city card, location card, you can directly view the location positioning. Even Soul’s ad is no longer “finding a soulmate” but “finding the most suitable person in reality“. Some internet celebrities discovered that the daily photos they posted on Weibo were moved to Soul by strangers, pretending to be another self.
In the mixed information of true and false, Soul has become another petri dish for killing pigs after Momo and Tantan. In Baidu search, the search results of “Soul deceived” have reached 2,340000. Some netizens left a message saying that 90% of the police information on the anti-fraud platform of the police where they are located are Soul’s fairy jumps.
In June 2019, Soul was removed from the shelves for rectification for spreading obscene and pornographic content. When it went online again, many old users chose to leave.
“Every day, there are all kinds of dog food, all kinds of face-based stories, dazzling skills, and fancy selfies. Fewer and fewer people are disclosing their opinions. The last person on the list is concerned Also left Soul.”
Burning 600 million yuan in exchange for turnover, debt ratio over 98%
Soul, who received financing, started a frantic sales promotion.
Since 2018, Soul’s ads have spread from Zhihu to the entire network. In Douyin and Kuaishou, Soul can let the Tufeizhai girls get rid of their orders. On Douban and Zhihu, Soul allows people to find soul mates. At the beginning of 2021, Soul sponsored the latest season of the high-profile web comprehensive “Star Detective”, and slogan replaced it with, “Follow the soul to find you, and play reasoning on Soul together.”
Almost every day on Weibo, there are people posting complaints: Can you stop tweeting Soul ads to me?
Behind the high-frequency advertising is high-sales marketing. The prospectus shows that in 2019 and 2020, Soul will spend 205 million yuan in sales and marketing and 621 million yuan. In 2021, as of March 31, the company’s sales and marketing expenses reached 471 million yuan, a year-on-year increase of 758.7%, and even exceeded the full-year expenditure in 2019. And Soul’s attitude is that as the business expands, advertising expenditures will continue to increase.
But the benefits of network-wide marketing are also obvious. According to the prospectus, Soul’s DAU(the number of daily active users) has reached tens of millions. In March 2021, its MAU(monthly active users) and average DAU were 33.2 million and 9.1 million, respectively, an increase of 109% over the same period last year. And 94.4%. Someone once witnessed the take-out guys near the company spending time on Soul during their break in the afternoon.
After the rapid growth of users, platform functions and charging items are also increasing. The same city card and location card mentioned earlier are member privileges. Members can use this to find out who browsed their homepage. After someone used the location card, they found it was a neighbor downstairs, and they were so embarrassed that they uninstalled the software immediately.
By satisfying the curiosity of users, Soul has obtained a lot of recharge income. In addition, Soul began to provide users with virtual goods through virtual currency “Soul Coin”. Value-added services have brought considerable revenue to Soul. The financial report shows that Soul’s revenue in 2020 is 498 million yuan, a year-on-year increase of 604.3%.
But while revenue is soaring, losses are also high. In 2019, Soul’s net loss attributable to ordinary shareholders was 349 million yuan, and the loss in 2020 was further expanded to 601 million yuan. As of March 31, 2021, Soul’s cash and cash equivalents were valued at 475 million yuan, and net loss reached 383 million yuan. From the end of 2020 to March 31, 2021, Soul’s debt-to-asset ratio increased from 45.6% to 98.6%. According to the prospectus, Soul will continue to increase sales and marketing expenses.
This is not the biggest flaw of Soul’s listing in the United States. Founder Zhang Lu also said that the current profitability is not Soul’s highest priority. But the question of investors is that how to improve the company’s asset structure, the prospectus neither proposes a feasible plan for this, nor does it predict the possible profit time.
“Almost all of our current revenue comes from value-added services. We may not be able to continue to grow or ultimately profit from such services. We cannot guarantee that our monetization strategy will be successfully implemented, nor can we guarantee that we Can generate sustainable revenue and profits.”
The debt ratio remains high, and the profit is unpredictable. For Soul, the biggest problem is probably how to persuade investors to buy their own stocks.
I don’t want to be a Momo, but I can’t get around the “Momo Mode”
The story goes back to the original point. Why is Soul so eager to differentiate itself from social software such as Momo? The answer may be that Soul urgently needs to tell investors a good story.
After all, If Soul is compared with Momo and Tantan as similar products, Soul does not have many advantages.
From the perspective of paying users, in 2019 and 2020, Soul’s average monthly paying users are 269,000 and 929,000, respectively, and the average monthly income contributed by each paying user is respectively RMB 21.9 and RMB 43.5. In the same type of Momo (including Tantan) in 2020, the monthly income contributed by each paying user is 97 yuan.
In terms of revenue, for the full year of 2020, Momo’s net revenue reached 15.024.2 billion yuan and net profit was 2.896.2 billion yuan. It has been profitable for 24 quarters. Among them, value-added services accounted for only about 30%, and live broadcasts and e-commerce were the main sources of revenue.
Soul’s total revenue in 2020 is 498 million yuan. It is worth noting that of the total revenue of 498 million yuan, the revenue of value-added services represented by Soul members and Soul currency recharges reached 485 million yuan, accounting for 99%, and commercialization has just begun.
In the prospectus, Soul repeatedly emphasized the difference between itself and online dating programs, no longer saying that their mission is to make the world free of lonely people, and changed to focus on the virtual avatar concept of the social meta-universe .
The English name of Metaverse is Metaverse, born out of the book “Avalanche” by science fiction writer Neal Stephenson 29 years ago, which means a virtual space-time composed of a series of AR, virtual reality and the Internet. set.
Now, with Facebook, Google, and Tencent entering the market one after another, Roblox, the concept stock of Meta Universe, has gone public for one year, and its market value has risen from US$4 billion to over US$40 billion.
Undoubtedly, the meta universe concept is closer to the wind, and it is easy to attract financing. In the prospectus, Soul quoted the iResearch report to rectify its own meta-universe concept: “Soul provides users with virtual identities and creates spaces for users to create, share and socialize based on interests and personalities.”
Except for the prospectus, Soul’s meta-universe concept is almost unknown. The real income is value-added services such as user recharge, which accounts for 99%. Mainly recharge with members and soul coins. Among them, whether it is members’ long audio, video posting permissions, Soulmate’s accelerated lighting, or Soulcoin unlocking chat permissions and unlocking same-city matching permissions, they are essentially catering to the user’s social needs, and are related to the so-called sharing interest and The weakening of the tree hole function of life.
The rapid increase in the cost of value-added services means that Soul’s “space for creating and sharing interests and personalities” is turning into a social space similar to Momo. Among the early users left, many are more concerned about the life sharing posts of the square, and many of them have not yet used the paid function.
This can also be seen from Soul’s latest online features. In 2020, Soul’s Voice Party and Soul Werewolves will begin closed beta. Among them, the voice party is a project that Momo and YY began to work hard two years ago.
Although the founder Zhang Lu explained repeatedly, the voice is only a supplement, and less than 10% of users will use it. However, Soul has expanded its voice chat rooms after adding voice functions, and added a series of gifts for rewards. This is undoubtedly paving the way for future profit realization.
In the first quarter of 2021, Soul has launched the virtual gift “Gift moji” function, which can purchase physical gifts for others and yourself. Some believe that this makes Soul more of the attributes of e-commerce and become the next one. The channel through which users consume.
Sharing life or social love, infinite convergence with Momo, or creating a real meta-cosmic space, I am afraid Soul has already had the answer in his heart.
This article is from WeChat official account:Phoenix WEEKLY Finance (ID: fhzkzk) , author: An Qi, editor: Zhang Yixiao