In China, a startup that turned selfies into a billion-dollar business

Actress Angelababy, who is of half Chinese and half German descent, does the selfie thing in a promo shot. Photo credit: Meitu.

The word “selfie” didn’t really take off until midway through 2013, shows Google Trends. Not long after, Oxford Dictionaries named it the word of the year.

But over in China, a very successful startup has been devoting itself to selfies since 2008. In that time it has become a multi-billion-dollar business as hundreds of millions of people around the world use Meitu‘s suite of mobile photo apps to pimp and primp their selfies.

An old version of the Meitu app in action. GIF by Tech in Asia. From promo video by Meitu.

The Chinese startup now has 270 million monthly active users and 52 million active daily users in its most popular app, MeituPic.

Aside from being ahead of the selfie craze, Meitu’s popularity was boosted by its prettifying and skin-whitening photo filters, which first took off in China before exploding overseas with multiple language versions of the app.

Angelababy at a launch event in 2015 for a new Meitu phone. She’s the brand ambassador for the startup’s series of selfie-centered Android phones. Photo credit: Zol.com.cn.

All those big numbers are important to the startup as it pitches itself to investors ahead of an IPO later this year, as the Wall Street Journal reported during the weekend. Meitu, based in the southeastern coastal city of Xiamen, far from the tech hub in Beijing, is looking to raise up to US$1 billion in a listing on the Hong Kong exchange at a valuation of around US$5 billion.

The team pulled in US$88 million in rising revenue in the first six months of 2016, but posted a widening operating loss of US$42 million in the same period.

Phoning it in

What’s most surprising about the startup is that, despite the 18 apps it has published in the iOS App Store alone, it’s really a smartphone company.

Meitu makes most of its revenue from phones, not from apps. Indeed, that’s where 95 percent of income comes from, according to the company’s initial listing prospectus this week filed in Hong Kong. Meitu debuted its first selfie-centered smartphone back in 2013, launching new models each year after. While it hasn’t had a Xiaomi-style impact on China’s blossoming phone market, its Android-based models with the powerful front-facing cameras are finding a niche audience – like this latest Meitu M6:

Streaming in