Zhihu, widely seen as China’s Quora, raised Series F investment totaling US$ 434 million last week.
The investment was led by Kuai, a popular short video service, and Baidu, the search engine whose own Q&A service was widely discredited because it was filled with ads.
Very popular, but not making money
The monetisation question for Zhihu has long been a subject of debate amongst pundits of China’s mobile internet space. The platform, after a few (sometimes painful) iterations, has managed to break through the growth dilemma and accommodate users of all calibers while maintaining the quality of the content (relatively).
Through a vast repository of answers and a combination of strategies from SEO to content push, Zhihu has managed to dominate many ‘informed’ users’ free screen time.
Zhou Yuan, Founder & CEO of Zhihu, appeared on that famous Wuzhen photo hosted by Pony Ma of Tencent. A year later, Tencent participated in Zhihu’s Series E investment of US$270 million. Note that Tencent also invested in Series C & D of Zhihu.
Zhou Yuan indeed took inspiration of Quora before creating Zhihu back in 2011.
Quora, valued at US$1.8 billion after receiving a total of US$226 million venture funding, has only recently started experiments of monetisation, through advertisements.
Kuai + Baidu
Many of the Zhihu users are moaning this investment, as both Kuai and Baidu are seeing as services designed for the less smart and less well informed. Kuai is filled with videos produced and consumed by country pumpkins, while Baidu is probably the most lambasted information service by Zhihui users.
How exactly will both of them interact with (or exercise control over) Zhihu moving forward remains a question. Both are now having an important tentacle in one of the most highly prized content platforms in China – that should theoretically give some interesting possibilities.
However, one should also not forget that Tencent remains a significant shareholder of Zhihu.
Maybe it is an alliance being formed to arrest the momentum of Bytedance?