It has been a year since Zhihu completed its previous E Round funding in August last year, which raised about $270 million, bringing its valuation to $2.5 billion.
Zhihu’s successful funding can be attributed to its healthy revenue model. Although it has only been officially commercialized since 2017, Zhihu mainly focused on two major revenue models of advertising and knowledge provision services. Zhihu indicated that in the first half of 2018, the company’s commercial advertising revenues grew a whopping 340% compared with the same period last year.
According to insiders familiar with the matter, Kuaishou CEO and Founder Su Hua has been eyeing Zhihu as a target of investment for a considerable period of time and expressed interest in participating in previous rounds of funding. However, negotiations did not pan out in previous discussions due to price disagreements and internal conflicts within Kuaishou. The deal was eventually finalized by executive leaders in the company including Su himself who pushed forth continuously with the endeavor.
Many speculate that Zhihu‘s moves over the past year and earlier this year indicate that the company may be eyeing for an IPO soon. It laid off up to 700 staff members last year, as Bjnews reported. Earlier this year, Zhihu founder and CEO Zhou Yuan announced an organizational restructuring and the appointment of a new CFO in an internal letter.