Babytree Preparing To Go Public

According to a Pew Market research conducted a few years ago, more than 75% of parents in the US reached out to social media networks for parenting related issues. It is not just the US, but parents of other nations also rely significantly on the Internet as a source of information. Recently, China-based Billion Dollar Unicorn Babytree announced plans to list on the Hong Kong Stock Exchange.

Babytree’s Offerings

Beijing-based Babytree was founded in 2006 by Bo Shao and Huainan Wang to provide young parents with online support for their parenting needs. The service was launched in 2007 and aimed at creating a social network for young parents to connect with each other. Today, Babytree has two primary platforms: Babytree Parenting on mobile app and website and WeTime, a mobile-only platform focused on child development.

Over the past decade, it has leveraged its social connection to develop high quality user-generated content. Additionally, Babytree has also invested in the development of professional content to cater to the needs of its target audience. In 2016, Babytree began offering premium content services to its users that allow parents to reach out to experts for a fee.

Babytree has also monetized its parenting community to establish a niche e-commerce platform Meitun Mama. It offers a comprehensive suite of product and services that cater to the learning, sharing, recording, and shaping requirements of parents in China.

Babytree’s Financials

Babytree earns revenues through e-commerce, advertising, and content management services. It has seen strong revenue growth over the past few years. For fiscal 2017, revenues grew 43% over the year to RMB 729.6 million (~$100 million) while losses have narrowed from RMB 935 million (~$128 million) to RMB 911 million (~$125 million).

By segment, it reported 51% of its revenues from advertising segment and 46% from e-commerce. It generated a modest 3% revenue through content monetization.

Among usage metrics, the platform has attracted an audience of more than 139 million monthly average users. It had a network of 338 advertising clients and 2,253 third-party e-commerce vendors at the end of fiscal 2017. According to a Frost and Sullivan report, Babytree has become the largest and most active maternity and child focused community platforms in China.

Babytree has been venture funded so far with $1 billion in funding from investors including Alibaba, China Merchants Wealth, Matrix Partners China, TAL Education Group, Shenzhen Qianhe Capital Management, Danfu Investment, Chenshan Capital, Zhaojin Investment, Fosun Group, and JuMei.com. Its last round was held in June this year when Alibaba purchased 10% stake in the company at a valuation of $2.2 billion. The company recently filed its prospectus to list on the Hong Kong Stock Exchange to raise $800 million to $1 billion at a valuation of $3-$5 billion.

Babytree appears to have a strong growth opportunity ahead of itself and will likely benefit from Alibaba’s e-commerce expertise. Together the companies will collaborate on marketing and customer access to drive its e-commerce business.

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