Momo, a popular mobile social dating app in China now listed on NASDAQ, announced its unaudited financial results; and, its net revenues increased over 13 times year-on-year to $44.8 million in 2014.

Total net revenues were $18.6 million in Q4 2014, an increase of 702.3% from $2.3 million during the same quarter of 2013. Momo’s MAU grew by 106% year-over-year to 69.3 million in Q4 2014. Momo introduced games on their platform, started cooperation with 58.com and Alibaba, and recently launched  their “gifting” service that enables users to send gifts to other users.

Momo Fourth Quarter 2014 Highlights

In December 2014, Momo began cooperating with 58.com to provide Momo users with easy access to 58.com’s marketplaces through the Discover function on the Company’s platform from which the Company expects to generate marketing revenues.

In January 2015, Momo began cooperating with Alibaba to place its merchant’s targeted advertisements on the Momo’s Nearby People function through which the Company will share marketing revenues with Alibaba.

In January 2015, Momo launched gift store services that allow users to send gifts to each other. The Company cooperated with merchants on Alibaba’s marketplaces to deliver gifts through which it will share revenues with Alibaba.

• Net revenues were $18.6 million in the fourth quarter of 2014, a substantial increase of 702.3% from the same period last year.
• Net loss attributable to Momo Inc. was $2.5 million in the fourth quarter of 2014, compared to a net loss of $3.1 million in the fourth quarter of 2013.
• Non-GAAP net loss attributable to Momo Inc. (note 1) was $0.1 million in the fourth quarter of 2014, compared to a non-GAAP net loss of $2.6 million in the fourth quarter of 2013.
• Diluted loss per American Depositary Share (“ADS”) was $0.20 in the fourth quarter of 2014, compared to a diluted loss per ADS of $0.14 in the fourth quarter of 2013. Each ADS represents two Class A ordinary shares.
• Non-GAAP diluted loss per ADS (note 1) was $0.16 in the fourth quarter of 2014, compared to a non-GAAP diluted loss per ADS of $0.12 in the fourth quarter of 2013.
• Monthly Active Users (“MAU”)¹ increased by 105.6% to 69.3 million in December 2014 from December 2013.
• Total number of employees was 456 as of December 31, 2014, compared to 209 as of December 31, 2013.

Full Year 2014 Highlights

Net revenues for the full year 2014 were $44.8 million, an increase of 1,330.3% from $3.1 million in 2013, primarily driven by the significant increase in net revenues from membership subscription and mobile games.

• Net revenues increased over 13 times year-on-year to $44.8 million in 2014.
• Net loss attributable to Momo Inc. was $25.4 million in 2014.
• Non-GAAP net loss attributable to Momo Inc. (note 1) was $18.8 million in 2014.
• Diluted loss per ADS was $1.94 for the full year 2014.
• Non-GAAP diluted loss per ADS (note 1) was $1.80 for the full year 2014.

Also read: China’s Mobile Social App Momo Launched Ad Platform for Offline Retailers

Read more: https://www.chinainternetwatch.com/?s=momo#ixzz3TZu9e7p3

58.com, a Chinese classified advertising website set up in 2005, targets at offering local life service with SME. It has 4 million active enterprises and 130 million monthly unique users, covering 27 major cities in the area of real estate, recruitment, automobile, housekeeping service, catering, second-hand market, etc.

It has been eight years since the foundation, it got six venture captial and filed for an IPO in Nasdaq in 2011 and an NYSE IPO in September 2013. 58.com realized USD 10.7 million revenue in 2010, USD 41.5 million in 2011 and USD 87.1 million in 2012. By the end of June 30 2013, it achieved USD 58.8 million revenue.

The reasons for going IPO in the U.S. are:

1. To increase brand influence and improve brand image.
2. To keep and attract more talents to work for 58.com.
3. The U.S. stock has the highest standards for listed companies, and it is a kind of recognition for the company’s management and development.
4. Classified ad websites have huge market potential, which means 58.com has a long term development plan.

Different from Craigslist, the hottest classified ad website in the U.S. which has been founded for 18 years, Chinese classified ad websites are merely beginners. To make profit, they still have to rely on large traffic volume to sell ads and membership tools.

Business Model Exploration

As the leader in classified ad website, 58.com can not compare with other companies and has to explore the right business model on its own.

Stage One: Advertising

In 2005, three classified ad websites were founded, 58.com, ganji and baixing. In eight years, 58 and ganji had been trying to find better business models to beat each other. In the early of 2011, they began advertising war.

Stage Two: Premium Subscriptions and Merchant-Facing Advertising

Premium subscriptions are the main source of 58.com revenue. In the first half of 2013, revenue from premium subscriptions is USD 35.46 million, and revenue from merchant-facing advertising is USD 22.43 million.

Stage Three: Group buying

In the end of 2011, 58.com and ganji both sought for business model other than the two mentioned above. They opened group buying services, but it was proved unsuccessful.

Stage Four: E-Commerce

In the beginning of 2012, 58.com started planing its e-commerce and half a year later, it gradually launched its mobile and tickets online transaction platform. This strategy made 58.com a pure classified ad website transform into a C2C platform. 58.com cooperated with Alipay in May 2013. Although 58.com e-commerce has been launched for a year, online transaction commission and other related revenue were only USD 950,000, 1.6% of total revenue in the first half of 2013.

In August 2013, 58 launched a house renting app with Baidu. As the leader in classified ad websites, it keeps developing new business model and improving information quality. China has a extremely large O2O market, and the key to success in the competition lies in mobile end.