Xiaohongshu Denies Reports of $20 Billion Pre-IPO Financing Round

On April 29th, there were reports that Chinese social media platform Xiaohongshu is undergoing a new round of financing with a valuation of $20 billion USD. An investor close to this round of financing said that this round is essentially a pre-IPO round for Xiaohongshu, which will serve as a pricing reference for the potential IPO of the company.

However, on the same day, Xiaohongshu responded by stating that these reports are not true.

Earlier reports had suggested that Xiaohongshu made a historic breakthrough in 2023, achieving profitability for the first time. According to four undisclosed sources, Xiaohongshu achieved a net profit of $500 million USD and a revenue of $3.7 billion USD last year.

The Xiaohongshu official website shows that the company has received investments from major companies and institutions such as Alibaba, Tencent, Genesis Capital, and Sequoia Capital. The company was founded by Mao Wenchao and Qu Fang in Shanghai in 2013. As of October 2019, Xiaohongshu had over 100 million monthly active users, 70% of whom were born in the 1990s.

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