BEIJING, Feb. 23, /PRNewswire/ -- Momo Inc. (Nasdaq: MOMO) ("Momo" or the "Company"), a leading mobile social networking platform in China, today announced that it has · Today, Momo, the Chinese location-based social networking app that has more recently made a big push into dating services and is traded on [ ] Momo buys Tantan, In February , the mobile-based social and entertainment platform Momo (NASDAQ:MOMO) acquired popular dating app Tantan for about $ blogger.com is widely considered the · Momo Inc., a leading mobile social networking platform in China, announced that it has reached a definitive agreement with Tantan Limited and all of its shareholders, pursuant to · The original thesis for Momo (NASDAQ: MOMO) was that, for what the business lacks in growth, it far more makes up in profitability and cash generation. It also benefits from ... read more
But my bullish thesis is built around the rise of Tantan and its potential to be the future growth engine of the company. An easy way to grasp the profound impact that Tantan could have on Momo's performance is to look at the growth of Match Group MTCH since the company released Tinder in On June 29, after a two-month hiatus, Tantan was relaunched on Chinese app stores.
Android at first, and a couple of weeks later on iOS. The fact that the app was back on digital shelves was a relief, given the particularly long suspension. A social platform that comes back online after such a process is likely to be working on firmer ground thanks to management working hand-in-hand with regulators.
But I was curious to see how long it would take for Tantan to resume its growth story. Would monetization resume as if nothing happened? Would the audience prove to be fickle and move on to greener pastures? Let's rewind a little and put Tantan's performance before the suspension in context. CEO Tang Yan's explained with confidence during the recent earnings call :. Our goal is to make Tantan a new engine for the company in the coming two to three years.
China is no exception to the rise of mobile dating worldwide, and Tantan - the leading Chinese dating app - already has more than 5 million paying users and growing. More importantly, Tantan only started monetizing its audience early , with an approach similar to Tinder with VIP subscription including features such as "see who likes me.
Tantan delivered astonishing growth in Q1 FY19 with 1. With 5 million paying users, Tantan is now ahead of Tinder. Source: Momo Q1 Earnings Transcript and Match Group Investor Presentation.
Chart by App Economy Insights. Source: Momo earnings call transcripts: 2Q18 , 3Q18 , 4Q18 , 1Q Th first quarter of the year is usually strong in user additions for Tantan due to the Chinese New Year. Overall, paying users are growing at an accelerating pace, with an impressive 1.
Source: Momo earnings call transcripts: 2Q18 revenue based on June run rate 3Q18 , 4Q18 , 1Q This revenue comes predominantly from VIP subscriptions. But here is the most important comment from Wang Yu - Founder-CEO of Tantan - during the last call:. We believe that having a good a la carte paying experience is important for providing better use consumer experience to those users.
If we can figure out the right a la carte paying experience for them, the ARPPU ceiling will be removed and the monetization potential of the Tantan community can be fully unleashed. As compared with a few months ago, we now have a better idea in how to make it happen.
Our plan on that front will gradually unfold, have to do regulatory issues are resolved and different operational data is back on a growth track. I explained in my Huya HUYA article the reasons why virtual gifts are a big deal in China and hard to understand from a western perspective. Viewers want to maintain Guanxi and Mianzi and are willing to spend a fortune for social status online.
To date, Tantan has been only monetizing the "Tinder" way, by offering features that people come to expect via a subscription model that enhances the free experience. But with the right a la carte options, such as virtual gifts to other users or ways to increase your visibility and social status on the platform, the monetization won't be capped by a fixed subscription fee anymore.
ARPPU average revenue per paying user could grow at an exponential level thanks to the surge of whales heavy spenders similar to profiles you can find in the gambling or gaming industry.
That's very much what Wang Yu means when he refers to the monetization potential being "unleashed. For more context, Tantan had been hovering around the top 35 grossing apps on the Chinese app store during Q1 FY Source: AppAnnie - Tantan grossing ranks in China iOS Q1 The situation was likely aggravated when management announced it would temporarily suspend newsfeed posts on the Momo platform between May 11 and June At this point in time, shares have rallied back up, close to their price pre-suspension.
But it looks like the market hasn't paid much attention to the most recent developments over the past week.
Tantan was finally available again on Chinese Android stores as of June 29, but the performance of apps on these stores can be very hard to track in China. The missing piece of the puzzle came two weeks later, when Tantan was made available for download again to iOS users, with in-app-purchase allowed. The question that remained was whether the community would be back in full force and be willing to spend money on re-activated in-app-purchase on iOS.
Tantan rarely cracked the top 25 before the suspension. But the dating app instantly roared to the top 15 most grossing apps on iOS in China as soon as it was available on July Better yet, as illustrated below, Tantan even reached the top 3 for a brief moment last week, illustrating how eager the users had been to use premium features over the past 10 weeks.
Management is definitely doing something right. Not only does this mean that Tantan made it through the recent government scrutiny and satisfied the requested moderation effort, but also that it was able to instantly surge back in popularity despite missing in action for weeks.
I see this as a reinforcing sign that Momo has an outstanding platform on its hands with strong staying power. Is this monetization surge a temporary situation? Probably not if we look into Tantan's grossing ranks over the past three months in India. You can see below how this past week in China is mostly matching the improved rankings achieved in India over the past three months.
A success that can be attributed to an efficient marketing strategy. Once again, this is a signal that Tantan is poised to be the next growth engine for Momo.
By dominating the Chinese market and rising in the Indian market, Tantan could eventually generate a revenue and cash flow similar to Tinder today. And let's not miss the forest for the trees. Momo already has an entire business going that's mostly the same size as Match Group's. And that's before the Tantan story eventually shows in its financial performance. For reference, I added below the comparison of these two cash machines over the last three years. Source: Investor Relations and Yahoo Finance.
Source: Q4 Earnings and Yahoo Finance. I believe the market is not paying attention yet to this very positive development, with Momo trading at only ~12 times free cash flow. However, investors should note that this isn't Momo's first clash with critics. Five years ago, China's state-run media repeatedly slammed Momo for its use as a prostitution app.
Tantan now faces similar claims, with the Nanchang Evening News claiming that its platform displays ads for prostitution. Prostitution is officially illegal in China, which raises troubling questions about Momo and Tantan's business models.
Other apps, like news aggregators or video streaming services, can police their own content with algorithms, but Momo and Tantan can't accurately track their users' offline activities. Tinder faced similar accusations before, but regulators generally turned a blind eye in most markets. I've repeatedly stated that Momo is an undervalued growth stock. However, I wouldn't touch this stock until Tantan returns to China's app stores. This would indicate that the suspension wasn't part of a broader crackdown on dating apps and that Momo isn't next on the government's hit list.
If Tantan stays suspended or regulators crack down on Momo, this company could be in serious trouble. Leo Sun has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Match Group. The Motley Fool recommends Momo.
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By Leo Sun — May 1, at PM. NASDAQ: MOMO MOMO. Today's Change. Current Price. Image source: Getty Images.
Tantan Is a Leading Social and Dating App in China for the Young Generation. Momo Inc. The deal is expected to close in the second quarter of , subject to customary closing conditions. Founded in , Tantan is a leading social and dating app in China for the young generation.
Tantan is designed to help users to find a romantic connection as well as to meet interesting people. With 5 billion matches and counting, Tantan has become a top choice for Chinese young singles to find love and relationships.
Also Read: Small Businesses Use Social Media Instead of a Website: Survey By Clutch. We will continue to invest and incubate more sub-brands to serve the social and entertainment needs of different demographics. Tantan has become widely recognized within a short period of three years since its inception, which is largely attributable to the outstanding performance of its talented team.
After the acquisition, the Tantan team will continue to operate the mobile apps under the Tantan brand with our full support. Also Read: Facebook Copyright ID System To Curb Infringements and Fake News. The acquisition is a critical strategic upgrade to cover a greater range of user demographics and needs, and build up a larger social networking market through complementary businesses and strategic synergy.
We are very confident in our future development. Momo connects people in a personal and lively way through a revolutionary mobile-based social networking platform. With powerful and precise location-based features, Momo enables users to connect with each other and expand relationships from online to offline. Leveraging its social interest graph engine and analysis of user behavior data, Momo is able to provide users a customized experience based on their social and entertainment preferences and needs.
Enabled by technological development, video creation and sharing is becoming an important way for users to socialize and have fun via the internet. Momo offers various video features and services including live streaming, short video as well as video chats for its users to interact in an immersive way.
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· Momo Inc., a NASDAQ-listed Chinese mobile social networking platform, today announced that it has agreed to acquire Chinese dating app Tantan Ltd. for US$ million in cash and around million newly issued class A ordinary shares. Momo will acquire % of Tantan, meaning Tantan has given up its previous intentions to pursue an initial public · Although Momo's revenue, net profit, and the number of paying users have slowed down, after the recent "eat" of Tantan, Momo will reintegrate and balance its stranger social · The original thesis for Momo (NASDAQ: MOMO) was that, for what the business lacks in growth, it far more makes up in profitability and cash generation. It also benefits from Momo-owned Tantan, a popular Tinder-like dating app in China, closed its social posting section on the same day to “implement content safety measures and create a healthy and positive BEIJING, Feb. 23, /PRNewswire/ -- Momo Inc. (Nasdaq: MOMO) ("Momo" or the "Company"), a leading mobile social networking platform in China, today announced that it has In February , the mobile-based social and entertainment platform Momo (NASDAQ:MOMO) acquired popular dating app Tantan for about $ blogger.com is widely considered the ... read more
September 5, Data by YCharts And let's not miss the forest for the trees. There are only two things that we find positives in the report. Peng also stated that Momo's goal was to make Tantan "a new engine for the company" within the next two to three years. Our goal is to make Tantan a new engine for the company in the coming two to three years. For Tantan, the deal will give the company not just a funding boost but potentially some economies of scale in its developer backend and other areas of its business.Tantan Is a Leading Social momo tantan Dating App in China for the Young Generation. Please report it on our feedback forum, momo tantan. Calculated by Time-Weighted Return since I've spent 12 years at Bandai Namco Entertainment, leading the Financial Planning and Analysis team in the transition to Digital, Mobile, and Game-as-a-Service. DTF Capital. On June 29, after a two-month hiatus, Tantan was relaunched on Chinese app stores. Is It Time to Swipe Right on the "Tinder of China"?