Coinspeaker
Tencent-Backed Social Platform Little Red Book Seeks $6 Billion Valuation

Social platform Little Red Book is seeking a $6 billion valuation. The platform is reportedly in talks with investors to raise between $400 million and $500 million. It’s also worth mentioning that it has the backing of internet giants Alibaba and Tencent holdings.

Xiaohongshu which means “little red book” has tried to release its app before now. The startup though has indicated that the app will be available for download to about 300 million users in app stores from July this year. It is also looking for funds to enable this to occur smoothly.

The startup has zero links to Chairman Mao Zedong’s Red book. It was founded in 2013 by Miranda Qu and Charlwin Mao. RED was first as an online community that makes recommendations for e-commerce websites in China. It also closed a Series D round of funding in 2018 with a valuation of about $3 billion. The list of investors included Tencent Investments Ltd., Alibaba, and others. Sources familiar with the recent talks say that the startup has been valued at about $5 billion recently. 

The social app which refers to itself as RED has been seen by many as a new trend in recommendations on the user experiences of electronic commerce sites. The evolution of recommendation into a social media platform is proof of the concept that startups can reinvent themselves as they go along.

Social media platforms in China are evolving. The concept behind the Little Red Book is more a peer-to-peer rather than centralized approach. This allowed the app to gain popularity pretty fast. RED gained notoriety after it got shut down in Android app stores by the Chinese government.

Red had also further evolved by 2017 into an all-in-one ecosystem. REDelivery was its delivery service. It became operational in May 2017. It also had its version of the popular shopping event Black Friday where it raised over CNY 100 million in just under two hours. This led to its fast-rising popularity.

After a review process, the app bounced back. It is set to once again conquer the social media space. This is indicated by the past high engagement rates that allowed just about anybody to become an influencer on the platform. 

Fashion and social media seem to have found a match in RED. Users are known to be trendy. Social media influencers have star power. RED will once again rule the Chinese social media space. Fashion-wise, that is.

Tencent-Backed Social Platform Little Red Book Seeks $6 Billion Valuation

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