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Yalla is a voice-centric social network for the MENA region that IPO'd this week at a $1.3b valuation
Their two apps had a combined 12.5m MAUs in Q2 '20 using them 4.5 & 2.5 hours per day. It did $53m in revenue thru June 2020 on operating margins of 48%
http://app.quotemedia.com/data/downloadFiling?webmasterId=101533&ref=115247401&type=PDF&symbol=YALA
Their two apps had a combined 12.5m MAUs in Q2 '20 using them 4.5 & 2.5 hours per day. It did $53m in revenue thru June 2020 on operating margins of 48%
http://app.quotemedia.com/data/downloadFiling?webmasterId=101533&ref=115247401&type=PDF&symbol=YALA
The initial app Yalla has a UI that's voice-first and revolves around voice group chats. Its described as "bringing offline user behaviors online".
It includes things like photo uploads, a friend feed, online / offline events and messaging. This likely increases the stickiness.
It includes things like photo uploads, a friend feed, online / offline events and messaging. This likely increases the stickiness.
In their F-1 filing, they put lot of emphasis on the initial on-boarding. They recommend rooms on the first-open, and then it gathers their interests based on usage and slowly improves those recommendations over time.
Here's how Yalla thinks about their whole ecosystem:
It's clear that despite the initial voice-first chat product, its vision is an all-encompassing social media, messaging, and entertainment ecosystem. And it has 48% operating margins on only $63m of revenue through Q2 of 2020.
It's clear that despite the initial voice-first chat product, its vision is an all-encompassing social media, messaging, and entertainment ecosystem. And it has 48% operating margins on only $63m of revenue through Q2 of 2020.
Yalla is majority owned by Chinese founders who were formerly ZTE Dubai executives. I'd assume ongoing geopolitical risks here. Big early investors appear to be SIG (ByteDance, Citrip) and Orchid Asia.
It has 274 employees, leveraging low cost labor in China for R&D + marketing.
It has 274 employees, leveraging low cost labor in China for R&D + marketing.
Yalla monetizes via virtual in-app upgrades, VIP treatment in rooms, and sending gifts (there's a leaderboard for who has given and received the most)
Its working: Before seeing explosive growth in free users during COVID, ARPU was $12/mo - similar to FB's monetization in the US
Its working: Before seeing explosive growth in free users during COVID, ARPU was $12/mo - similar to FB's monetization in the US
Its second product, Yalla Ludo, saw even faster growth during COVID - almost 10x'ing MAU's from 865k to 7.6m by June 2020. 407m games were played in Q2.
It's still early, but despite the higher engagement, monetization on Ludo significantly lags its other voice-centric product.
It's still early, but despite the higher engagement, monetization on Ludo significantly lags its other voice-centric product.
What I'm most concerned about is usage and long-term stickiness.
The filing mentions how active MENA social users are - but has no mention of Yalla's DAU's. It also mentions 68.6m registered users. With 12.5m MAU's in Q2 2020, its ~18% long-term retention has room to improve.
The filing mentions how active MENA social users are - but has no mention of Yalla's DAU's. It also mentions 68.6m registered users. With 12.5m MAU's in Q2 2020, its ~18% long-term retention has room to improve.
Another concerning disclosure was highlighting usage stats over a six-month period (not just Q2 like everything else in the filing). To me, it indicates a decline in usage post-quarantine.
Not to mention... perfect time to go public if you don't want to report your Q3 metrics
Not to mention... perfect time to go public if you don't want to report your Q3 metrics
Still - despite likely slowing, Yalla put up 48% operating margins on $53m in revenue through Q2 (up 99% YoY)
At a $1.3b valuation, the public market is valuing Yalla at $104 per MAU. Assuming DAU/MAU is roughly 30%, that ballparks it at $347 per DAU and 20.5x its 2019 revenue.
At a $1.3b valuation, the public market is valuing Yalla at $104 per MAU. Assuming DAU/MAU is roughly 30%, that ballparks it at $347 per DAU and 20.5x its 2019 revenue.
I'm not too bullish on the audio social space for some of the retention issues highlighted above - but its impressive how Yalla quickly expanded into other products.
It's great to get public comps, and will be interesting to see how the space plays out the next few years!
It's great to get public comps, and will be interesting to see how the space plays out the next few years!
