Discussions are underway among major investors in Xiaohongshu, a Chinese platform often compared to Instagram, to sell stakes at a valuation of US$20 billion.

Notable backers involved reportedly include GSR Ventures and Tiantu Capital.

Companies such as Tencent Holdings and existing shareholders like HongShan Capital Group and Hillhouse Investment are also interested, according to sources familiar with the negotiations.

However, these discussions are ongoing, and potential delays or deal cancellations may occur, as current shareholders possess priority purchase rights.

This development follows increased interest in Xiaohongshu, partly due to speculation about a potential TikTok ban in the United States.

The app has recently become the most downloaded free application on iOS, making it an appealing alternative for users seeking to leave TikTok.

Founded in 2013 by Charlwin Mao Wenchao and Miranda Qu Fang, Xiaohongshu began as a shopping guide. It has since added features like reviews, influencer-driven sales, and live shopping.

The platform currently boasts about 300 million monthly active users.

Xiaohongshu’s valuation reached a peak in 2021 amid a surge in China’s internet sector, though it later declined.

Recent investments from firms such as Loyal Valley Capital and a Citic Group affiliate placed its value at over US$17 billion last year.

Recent Xiaohongshu developments