Newborn Town Grows in Line with the Metcalfe's Law

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

There is a core law in the Internet industry that was proposed by Robert Metcalfe, the inventor of the Ethernet, and was named after him as Metcalfe’s Law. According to Metcalfe’s Law, the value of the network is proportional to the number of network users squared.

As shown in Newborn Town’s latest Interim Financial Report, the number of overseas uses remained on a stable and high rise and the cumulative downloads of social applications reached 254 million at the end of June 30 2021, with 17.41 million Monthly Active Users (MAU) on average during the first half of 2021, increasing by about 38% than that in the second half of 2020.

In response to the rapid growth in the number of users, Newborn Tow recorded revenue of RMB1.04 billion and a net profit of RMB0.14 billion in the first half of the year, showing a year-on-year increase of nearly 6 times and nearly 40 times respectively.

In fact, what investors in the Internet sector value most is not a company’s short-term revenue and profit, but the sustainability of its user growth. This is because the expansion of user groups of social products and diversified monetization methods will surely bring about rapid growth in operating revenue.

The rapid growth in Newborn Town’s revenue not only benefits from the sharp increase in the number of users, but also from the constantly diversified social product portfolio and the improvement of its operational efficiency.

Newborn Town began to expand its business to foreign markets in 2013 and began to deploy its social business in 2015, and has its audio and video social platforms such as MICO and YoHo having been downloaded for more than 200 million times worldwide with more than 18 million MAU on average in the second quarter of 2021.

The Gulf countries in the Middle East contribute a great deal to Newborn Town’s revenue. For example, on August 25:

• In Saudi Arabia, MICO and YoHo ranked 10th and 8th respectively among the top-grossing social apps in Google Play, and ranked 7th and 6th respectively among the top-grossing social apps in App Store.
• In the UAE, YoHo and MICO ranked 5th and 11th among the top-grossing social apps in Google Play, and MICO ranked 4th among the top-grossing social apps in App Store.

It is an indisputable fact that Newborn Town’s products rank in the top in the top-grossing social app rankings in many countries worldwide, which provides reliable and verifiable evidence for the company’s satisfactory performance data, and indicates that the product and operational strategies applied by the company work well.

In recent years, Chinese Internet companies have done well in business expansion to foreign markets. According to the data from Sensor Tower, in 2020, the total revenue of Chinese social apps launched in global markets increased by 127% year-on-year, and the total revenue of Chinese entertainment apps launched in global markets increased by 250% year-on-year.

As shown in the data from Analysys International, MICO ranked top five Chinese going-global entertainment and social apps contributing at least USD100 million to corporate revenue in 2020, and therefore is of great potential.

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.