In an exciting development within the tech landscape, Meitu Inc., primarily recognized for its innovative beauty applications, has recently completed a significant funding round for its subsidiary Pixocial in Singapore. Meitu Inc., which soared in value shortly after its 2016 Hong Kong IPO, is once again in the spotlight with this strategic business maneuver aimed at revitalizing its financial strength and market position.
Pixocial has attracted a notable $22 million in its latest financing, bringing the company’s valuation to a robust $140 million. This move signals a vote of confidence from investors, particularly as Meitu’s own market value hovers at HK$17.5 billion ($2.24 billion). The funding round drew attention from impressive backers, including Fidelity’s Eight Roads and Hong Kong-based Future X Capital, further solidifying Pixocial’s standing in the tech industry.
At the helm of Pixocial’s new direction is Wu Xinhong, co-founder and CEO of Meitu, who has taken the role of the chairman of Pixocial, and Song Mingyang, appointed as the CEO, who brings his expertise from Meitu’s global product innovation team and a stellar academic background from Carnegie Mellon University. This leadership, combined with their strong focus on AI digital solutions, positions Pixocial for potential future success.
Pixocial, now 80.6% owned by Meitu following the spinoff, made a significant contribution to Meitu’s net income in 2022, amounting to 75 million yuan. Subscription services rolled out by Pixocial for Meitu’s overseas apps, AirBrush and Beauty Plus, have demonstrated impressive growth, increasing Meitu’s subscription revenue by 57.4% in 2022, making it the largest contributor to the company’s overall revenue.
The move to separate Pixocial from Meitu’s main operations resonates with a broader trend among Chinese tech giants, like ByteDance and PDD Holdings, to delineate their domestic and international operations. Such structuring could alleviate concerns regarding data privacy, particularly in foreign markets where apprehensions regarding data access by the Chinese government are prevalent, especially in the United States in light of issues raised about TikTok.
While Pixocial’s specific plans for targeting markets remain to be detailed, Meitu’s applications have seen notable popularity in several countries, including Japan, the United States, Brazil, Canada, Australia, and New Zealand. Despite the unpredictable nature of app market success, Pixocial’s newly secured capital and independence grant it the agility necessary to expand its international presence, and potentially, make a separate mark in the public markets distinct from Meitu.
For those following the tech and investment sphere, the strategic developments at Meitu and Pixocial are certainly worth watching. I encourage readers to follow the unfolding narrative of these companies and consider the implications of their actions on the broader technology market. As investors and tech enthusiasts alike ponder the possibilities, let’s engage in the conversation. What do you think the future holds for Pixocial’s journey? Share your insights and stay tuned for more updates on this and other exciting market developments.
