Source: BohuFN

Recently, according to a report from The Information citing insiders, ByteDance (hereinafter referred to as "Byte") plans to raise $700-800 million for Dongchedi to promote its independent development and pave the way for its IPO.

As of now, Byte has not responded to Dongchedi's IPO ambitions. However, last July, Byte already handed over the automotive content under Douyin, Toutiao, and Xigua Video to Dongchedi for overall operation; In January this year, Dongchedi transformed from a wholly-owned subsidiary of Byte's Toutiao into an independent entity, and the outside world believes that Dongchedi has been preparing for its listing.

Industry insiders speculate that after Dongchedi completes this round of financing, its valuation may reach $3 billion, equivalent to the current market value of Autohome. This means that under the background of the "three-way market" between Autohome, Yi Che, and Dongchedi, Dongchedi will not face too much pressure.

If all goes well, this will be the first IPO under Zhang Yiming's leadership. Against the backdrop of Byte focusing on its core business in recent years, what impact will Dongchedi's "independence" bring to Byte; for Byte, which holds a huge amount of "traffic," can it tell a "new story" in the automotive field.

01 Mature Business Model, "Gold Father" Becomes the Key

Dongchedi originated from Byte's automotive channel on Toutiao and launched its APP for independent operation in 2017. After years of development, Dongchedi has become a player on the same level as Autohome and Yi Che.

According to The Information, behind Dongchedi's financing, there are the figures of Byte's old shareholders. Sequoia Capital China Fund is the lead investor, and KKR and renowned private equity investment fund General Atlantic will also participate.

Some industry insiders analyzed that considering Byte's slow listing progress, it is not a good time to forcibly rush for listing. Finding a more promising business to spin off from Byte may also be Byte's "accountability" to its old shareholders.

Among the series of businesses like Toutiao, Douyin, TikTok, Chaoxi Guangnian, Feishu, and Dali Education, Dongchedi is clearly the most mature in terms of business model and has a clearer profit path. Moreover, as it is not Byte's core business, even if it is spun off, it will not have a significant impact on Byte.

However, Dongchedi's clear business model may be an advantage but also a weakness that limits platform development. Looking back at Dongchedi's development, at the beginning of its independent operation, it also positioned itself as "telling the truth" to differentiate itself from Autohome and Yi Che and break the industry status quo where automotive information platforms are controlled by car manufacturers.

However, even though Dongchedi's starting point is good, in the context of no major changes in the automotive circle, Dongchedi is also hard to avoid being conventional, and "information matching" remains its primary business model.

Data shows that Dongchedi, backed by Byte's traffic irrigation, has reached a user scale of tens of millions, ranking in the first tier with Autohome and Yi Che. According to Jiemian News, Dongchedi's daily active growth rate has reached 57% in the past two years, and from a quarterly perspective, Dongchedi has even surpassed Autohome and Yi Che to become the "king of traffic" among automotive information platforms.

But the more Dongchedi relies on "traffic," the less imaginative its business model in the automotive field becomes. According to Autohome's 2024 first-quarter report, even after 20 years of establishment