A Decade and Four IPO Attempts: Can Himalaya Fulfill Its Dream on the Hong Kong Stock Exchange?

"Light a candle, ghosts blow out the lamp, survey the land and search for the star peak" — this classic line, combined with the male narrator's magnetic voice, instantly transports listeners into a mysterious and eerie underground world. The audience feels as if they have become Hu Bayi, the protagonist of The Grave Robbers' Chronicles, experiencing thrilling tomb-raiding adventures alongside him.

The platform hosting this audiobook is Himalaya.

On April 12, Himalaya submitted its IPO prospectus to the Hong Kong Stock Exchange. According to the prospectus, Himalaya generated revenue of 6.16 billion yuan in 2023, achieving positive profitability for five consecutive quarters.

Himalaya's IPO was expected, as this super unicorn is backed by prominent VC/PE firms such as 兴旺投资，挚信资本，Tencent，泛大西洋投资，普华资本，Xiaomi，阅文集团，合鲸资本， and 创世伙伴资本. Its valuation reached 31.4 billion yuan as early as 2020.

However, as the absolute leader in the online audio industry for 12 years, Himalaya first attempted a U.S. IPO in May 2021 but withdrew its application four months later. In September 2021 and March 2022, it submitted IPO applications to the Hong Kong Stock Exchange, both of which ultimately lapsed.

Now, with its profitability report, Himalaya is setting sail for the fourth time. Can it successfully land in the capital market?

1. A 70s-born entrepreneur taps into the "ear economy," achieving 224 million yuan in net profit in 2023

Founded in 2012, Himalaya is an interactive platform between content creators and users, with a clear vision and positioning: to provide comprehensive spiritual nourishment for the public and redefine how people interact with knowledge, information, and entertainment. This positioning has made Himalaya a leader in the online audio industry.

When discussing Himalaya, one cannot overlook its founder, Yu Jianjun, a Fujian-born entrepreneur. From startup to IPO, from burning cash to profitability, this 70s-born businessman has played a pivotal role as the helmsman.

Born in the 1970s, Yu Jianjun is a serial entrepreneur. From 1998 to 2009, he founded "Simulated China," a 3D panoramic image stitching software "Jietu," the street-view mapping project "City8," and the virtual world project "There World." During this time, he met Chen Yuxin (Chen Xiaoyu), a key partner at Himalaya. Chen, formerly an investment director at Zendai Group, resigned as a director of Himalaya in April 2021 due to personal health reasons.

In August 2012, 36-year-old Yu Jianjun and Chen Yuxin recognized the potential of the "voice economy" and co-founded the online radio platform Himalaya at the Himalaya Center under Zendai Group. They secured 1.0895 million USD in angel funding from Dai Zhikang, founder of Zendai Group. Unexpectedly, this fifth entrepreneurial venture became a huge success amid the voice economy boom.

▲Image: Himalaya founder Yu Jianjun

Capital soon took notice. From 2012 to 2020, Himalaya completed 12 rounds of financing, with prominent investors like Tencent, Xiaomi，阅文，泛大西洋投资， and 创世伙伴资本 joining in. After its Series D financing in 2017, Himalaya became a unicorn with a valuation of 12 billion yuan just five years after its founding. By 2020, its valuation reached $4.34 billion (approximately 31.4 billion yuan) in its E4 round of overseas financing.

In the fast-paced modern world, mobile audio's companionship and contextualization fill people's fragmented time, ushering in a golden age for platforms like Himalaya. Through its four business segments—subscriptions, advertising, live streaming, and other innovative products and services—Himalaya generated revenue of 6.16 billion yuan in 2023, with adjusted net profit reaching 224 million yuan. This marked its first profitable year after losses of 718 million yuan and 296 million yuan in the previous two years.

As of 2023, Himalaya had about 2.9 million active content creators. The company also partnered with over 220 publishers, including CITIC Press, and around 150 online literature platforms, offering audio content across 459 categories, including personal growth, history and humanities, family and emotions, business and finance, and entertainment.

High-quality content has attracted a massive user base.

In 2023, Himalaya's average monthly active users (MAUs) reached 302.6 million, including 133 million mobile MAUs and 169.6 million MAUs accessing audio content via IoT and third-party platforms. That year, mobile users spent 1.7873 trillion minutes listening to audio content on Himalaya, accounting for about 60.5% of the total listening time on all Chinese online audio platforms. Each mobile MAU spent an average of 130 minutes daily on the platform.

2. After a decade of burning cash, profitability relies entirely on cost-cutting

Despite its glamorous image, Himalaya has endured a decade of cash burn and three failed IPO attempts.

According to CIC data, Himalaya held a 25% share of China's online audio market by revenue in 2023. As the industry leader, its development path aligns with the evolution of the online audio sector.

From the early days of mobile internet reshaping audio scenarios, to embracing the knowledge payment wave, and now relying on copyrighted audiobook content, Himalaya has participated in every trend, maintaining clear advantages in content reserves, user reach, and channel distribution.

However, its actual operational performance has long been shrouded in uncertainty.

At the time, Himalaya's strategy involved high costs for copyright, content creation, marketing, R&D, and management. While rapid user growth was achieved through short-term cash burn, the company aimed to leverage platform operational efficiency and economies of scale to reduce operating expenses as a percentage of total revenue.

Yet, Himalaya soon found itself trapped in persistent losses. According to its three previous prospectuses, annual losses from 2019 to 2021 were 1.9248 billion yuan, 2.882 billion yuan, and 5.106 billion yuan, respectively, with 2021 losses surging 77% year-over-year. Adjusted losses for these three years totaled 748.6 million yuan, 539.4 million yuan, and 759.2 million yuan, amounting to 2.05 billion yuan in cumulative losses.

Himalaya attributed these losses primarily to content acquisition, sales and marketing, and R&D expenses.

If the first withdrawal from the U.S. IPO was due to factors affecting Chinese stocks, the subsequent two Hong Kong IPO setbacks were linked to Himalaya's negative profitability at the time, coupled with a sluggish Hong Kong market unable to deliver expected valuations and liquidity.

Starting around 2022, Himalaya began implementing cost-cutting measures, including business integration, reducing operational costs (including headcount), lowering payouts to content creators and copyright holders, and optimizing growth—all to achieve profitability and ensure long-term survival.

At an internal employee meeting in August 2022, Yu Jianjun set ambitious targets: achieving profitability in Q4 2022, full-year profitability in 2023, and annual revenue of 20 billion yuan with 4 billion yuan in profit within five years.

To meet these goals, Himalaya adopted a multi-pronged strategy: enhancing strategic and organizational clarity, focusing on user value creation, and driving cost efficiency to build sustainable profitability. So far, Himalaya has steadily progressed toward these targets.

But where does the profitability story come from?

The financial report attributes it to an expanded user base, improved monetization, optimized cost structure, and operational efficiency gains. However, a closer look reveals that profitability stems largely from aggressive cost-cutting.

Himalaya's sales and marketing expenses as a percentage of revenue have declined annually, from 44.9% in 2021 to 33.6% in 2023. Moreover, since 2021, the company has significantly reduced these expenses, from 2.63 billion yuan in 2021 to 2.07 billion yuan in 2023—a drop of nearly 600 million yuan in two years.

R&D expenses were also slashed, falling from 17.5% of revenue in 2021 to 15.1% in 2023. In 2023, R&D spending was about 930 million yuan, compared to 1.03 billion yuan and 940 million yuan in the previous two years. The prospectus explains this as a strategic shift in sales and marketing priorities, leading to changes in channel promotion and branding/advertising expenditures.

Additionally, workforce adjustments were made.

Since 2022, Himalaya has undergone significant layoffs. Late last year, reports suggested a 30% company-wide reduction, with senior vice president Qin Lei, overseeing product, growth, and content ecosystems, departing. The cuts are reflected in the prospectus: 1,705 employees were let go in 2022 and 2023, a 40% reduction. Employee benefits under operating costs dropped from 190 million yuan in 2021 to 120 million yuan in 2023, a sharp 37% decline.

Profitability is a company's core competitiveness, but how long can it last when achieved through cost controls and layoffs?

3. Fourth IPO attempt: Will it succeed this time?

Now, news of Himalaya's fourth IPO bid has brought long-form audio back into the capital market spotlight. But with its newfound profitability, does Himalaya still deserve an IPO?

Two critical issues loom: stagnating user growth and rampant copyright infringement.

According to Analysys's 2022 China Audio Industry Product Insights, domestic online audio MAUs have stabilized around 300 million since March 2021. By Q3 2022, Himalaya's full-scenario MAUs reached 282 million. Growth is nearing its ceiling—hardly good news.

Even as the undisputed leader in audio, Himalaya's user listening time is declining: from 144 minutes in 2021 to 142 minutes in 2022, and further to 130 minutes in 2023.

To maintain its position, Himalaya has experimented with audiobooks, education, and knowledge payments—chasing every trend, sometimes at the cost of its reputation. In 2023, the AI wave reached audio. Himalaya developed the "Everest Audio AI Model" for AI-driven audiobook and podcast production, claiming AI can streamline pre-recording, recording, and post-production, improving efficiency by 50x compared to manual creation. AI-assisted production is said to be 3x more efficient.

As of December 31, 2023, AIGC content accounted for 240 million minutes, or 6.6% of Himalaya's total audio content. For now, the Everest AI Model remains a tool rather than a transformative force.

Meanwhile, 19.6 million UGC (user-generated content) creators contribute to Himalaya's platform. While UGC is cost-effective and drives traffic, the lack of copyright awareness among creators has led to persistent infringement issues.

In 2015, Himalaya was sued for adapting Tang Jia San Shao's Douluo Dalu into an audiobook without permission, with over a million plays. The court ordered Himalaya to remove the content and pay 150,000 yuan in damages.

In 2022, author Wu sued Himalaya for unauthorized distribution of his novel Stain. The court ruled against Himalaya, awarding Wu 30,000 yuan.

As of April 16, 2024, Qichacha records 2,503 legal disputes involving Himalaya, many related to copyright and intellectual property.

How can Himalaya break the user growth bottleneck and address copyright risks? How can it revitalize the "ear economy" narrative, boost MAUs, and accelerate revenue growth?

These are urgent challenges for Himalaya's impending IPO—and existential questions it must answer.

Author｜Zhang Yao

Editor｜Hu Zhanjia

Operations｜Chen Jiahui

Produced by｜LingTai LT (ID: LingTai_LT)