Ruhnn, a company that enables influencers to sell through ecommerce and is plotting to change the faces of China’s fashion industry, has raised $125 million after it listed on the Nasdaq on Wednesday.

The company sold 10 million American Depositary Shares at $12.5 a pop, the midpoint of its expected range. In an earlier filing with the U.S. Securities and Exchange Commission, the Alibaba-backed firm targeted to raise $200 million from its initial public offering.

While big brands in the U.S. are turning to influencers for marketing actions, a similar trend has been brewing in China. Key opinion leaders, or KOLs as they are locally called, build up millions of followers across social media on account of their expertise in specific fields, ranging from video games to Korean fashion. Recognizing their commercial possibility, savvy talent managers jostle to sign these stars to generate ecommerce success.

Frost & Sullivan’s data shows sales generated by China’s KOLs reached 32.9 billion yuan ($4.9 billion) in 2017 and are expected to produce a healthy 40.4 percent compounded annual growth rate (CAGR) over the next five years. Though in its nascent state, the KOL economy has charmed China’s younger generations. Ruhnn says more than 80 percent of the fans following its KOLs are millennials, or, people born between the 1980s to early 2000s.

Ruhnn’s management team / Photo: Ruhnn via Weibo

Ruhnn, which was founded in 2016 by Feng Min, a former online shop owner, is one of the early movers to capitalize on China’s up-and-coming internet stars. The Alibaba-backed company supplies a suite of services for KOLs to connect with fans on one hand and brands and retailers on the other. That means influencers receive training to grow their fame and create digital content to market products. In 2018, Ruhn’s batch of 113 contracted KOLs generated 2 billion yuan ($300 million) in total sales and collected nearly 150 million fans across various social channels.

The firm, which is based in Alibaba’s backyard Hangzhou in eastern China, is more than a talent agency in the traditional sense. The startup operates online stores for online stars and takes care of the full ecommerce cycle, from product design, manufacturing, warehousing, delivery (which it enables through third-party logistics firms) all the way to after-sales services.

The majority of Ruhnn’s revenues comes from direct sales of fashion and lifestyle goods, but the company carved out a less asset-heavy platform model in 2017. The approach essentially lets third-party stores and merchants buy advertising services from Ruhnn’s rank of KOLs. Ruhnn has grown this segment from less than 1 percent of its total revenues in 2017 to 11.7 percent in the nine months ended December 2018.

Companies like Ruhnn, which are sometimes called KOL “facilitators” or “incubators,” not only empower internet celebrities; they are also crucial to social platforms hungry for content. Ruhnn’s stars are all over the Chinese internet, engaging users on WeChat, Weibo and Douyin, which is TikTok’s local version.

Zhang Dayi and her fans / Photo: Zhang Dayi via Weibo

Ruhnn and other ecommerce sites that rely on KOLs to sell, such as NYSE-listed, Hangzhou-based Mogu, are also tipped to shake up China’s fashion supply chain. Traditionally, brands get consumer reaction only after they put things on sale. KOL facilitators flip that process by asking influencers to try on brands’ sample garments. From there the stars will ask fans for feedback, based on which brands can adjust their design and factory orders. Ruhnn has also barcoded its inventory, so KOLs and retailers know exactly how consumer tastes are shifting in real time.

In terms of financial outlook, Ruhnn’s revenues increased from 577.9 million yuan ($86.1 million) to 947.6 million yuan between 2017 and 2018. The company is still operating in the red, incurring a net loss of about 90 million yuan, up from 40.1 million yuan a year ago.

Despite being the largest KOL facilitator by revenue according to data from Frost & Sullivan, Ruhnn faces a few hurdles. A report (in Chinese) done by Tencent shows people born after the 2000s are growing tired of being sold to by KOLs. In addition, China could tighten its tax laws around the nascent KOL industry that can have revenue implications for companies like Ruhnn.

The most pressing issue is perhaps Ruhnn’s overreliance on a small handful of top KOLs. One particular influencer, Zhang Dayi, accounted for about half of its total sales for nearly three years. That means Ruhnn is under tremendous pressure to retain Zhang, who currently serves as the firm’s marketing chief, be it through financial incentives or marketing support for the celebrity.

The problem is not unique to Ruhnn, as creators are key to all of China’s content-heavy platforms including esports streaming site Huya and short video app Douyin. These companies have spent generously to recruit KOLs and deployed big data to track user sentiments, but we all know that a celebrity’s success is at times a matter of luck.

Ruhnn, a company that enables influencers to sell through ecommerce and is plotting to change the faces of China’s fashion industry, has raised $125 million after it listed on the Nasdaq on Wednesday.

The company sold 10 million American Depositary Shares at $12.5 a pop, the midpoint of its expected range. In an earlier filing with the U.S. Securities and Exchange Commission, the Alibaba-backed firm targeted to raise $200 million from its initial public offering.

While big brands in the U.S. are turning to influencers for marketing actions, a similar trend has been brewing in China. Key opinion leaders, or KOLs as they are locally called, build up millions of followers across social media on account of their expertise in specific fields, ranging from video games to Korean fashion. Recognizing their commercial possibility, savvy talent managers jostle to sign these stars to generate ecommerce success.

Frost & Sullivan’s data shows sales generated by China’s KOLs reached 32.9 billion yuan ($4.9 billion) in 2017 and are expected to produce a healthy 40.4 percent compounded annual growth rate (CAGR) over the next five years. Though in its nascent state, the KOL economy has charmed China’s younger generations. Ruhnn says more than 80 percent of the fans following its KOLs are millennials, or, people born between the 1980s to early 2000s.

Ruhnn’s management team / Photo: Ruhnn via Weibo

Ruhnn, which was founded in 2016 by Feng Min, a former online shop owner, is one of the early movers to capitalize on China’s up-and-coming internet stars. The Alibaba-backed company supplies a suite of services for KOLs to connect with fans on one hand and brands and retailers on the other. That means influencers receive training to grow their fame and create digital content to market products. In 2018, Ruhn’s batch of 113 contracted KOLs generated 2 billion yuan ($300 million) in total sales and collected nearly 150 million fans across various social channels.

The firm, which is based in Alibaba’s backyard Hangzhou in eastern China, is more than a talent agency in the traditional sense. The startup operates online stores for online stars and takes care of the full ecommerce cycle, from product design, manufacturing, warehousing, delivery (which it enables through third-party logistics firms) all the way to after-sales services.

The majority of Ruhnn’s revenues comes from direct sales of fashion and lifestyle goods, but the company carved out a less asset-heavy platform model in 2017. The approach essentially lets third-party stores and merchants buy advertising services from Ruhnn’s rank of KOLs. Ruhnn has grown this segment from less than 1 percent of its total revenues in 2017 to 11.7 percent in the nine months ended December 2018.

Companies like Ruhnn, which are sometimes called KOL “facilitators” or “incubators,” not only empower internet celebrities; they are also crucial to social platforms hungry for content. Ruhnn’s stars are all over the Chinese internet, engaging users on WeChat, Weibo and Douyin, which is TikTok’s local version.

Zhang Dayi and her fans / Photo: Zhang Dayi via Weibo

Ruhnn and other ecommerce sites that rely on KOLs to sell, such as NYSE-listed, Hangzhou-based Mogu, are also tipped to shake up China’s fashion supply chain. Traditionally, brands get consumer reaction only after they put things on sale. KOL facilitators flip that process by asking influencers to try on brands’ sample garments. From there the stars will ask fans for feedback, based on which brands can adjust their design and factory orders. Ruhnn has also barcoded its inventory, so KOLs and retailers know exactly how consumer tastes are shifting in real time.

In terms of financial outlook, Ruhnn’s revenues increased from 577.9 million yuan ($86.1 million) to 947.6 million yuan between 2017 and 2018. The company is still operating in the red, incurring a net loss of about 90 million yuan, up from 40.1 million yuan a year ago.

Despite being the largest KOL facilitator by revenue according to data from Frost & Sullivan, Ruhnn faces a few hurdles. A report (in Chinese) done by Tencent shows people born after the 2000s are growing tired of being sold to by KOLs. In addition, China could tighten its tax laws around the nascent KOL industry that can have revenue implications for companies like Ruhnn.

The most pressing issue is perhaps Ruhnn’s overreliance on a small handful of top KOLs. One particular influencer, Zhang Dayi, accounted for about half of its total sales for nearly three years. That means Ruhnn is under tremendous pressure to retain Zhang, who currently serves as the firm’s marketing chief, be it through financial incentives or marketing support for the celebrity.

The problem is not unique to Ruhnn, as creators are key to all of China’s content-heavy platforms including esports streaming site Huya and short video app Douyin. These companies have spent generously to recruit KOLs and deployed big data to track user sentiments, but we all know that a celebrity’s success is at times a matter of luck.

Ruhnn, a company that enables influencers to sell through ecommerce and is plotting to change the faces of China’s fashion industry, has raised $125 million after it listed on the Nasdaq on Wednesday.

The company sold 10 million American Depositary Shares at $12.5 a pop, the midpoint of its expected range. In an earlier filing with the U.S. Securities and Exchange Commission, the Alibaba-backed firm targeted to raise $200 million from its initial public offering.

While big brands in the U.S. are turning to influencers for marketing actions, a similar trend has been brewing in China. Key opinion leaders, or KOLs as they are locally called, build up millions of followers across social media on account of their expertise in specific fields, ranging from video games to Korean fashion. Recognizing their commercial possibility, savvy talent managers jostle to sign these stars to generate ecommerce success.

Frost & Sullivan’s data shows sales generated by China’s KOLs reached 32.9 billion yuan ($4.9 billion) in 2017 and are expected to produce a healthy 40.4 percent compounded annual growth rate (CAGR) over the next five years. Though in its nascent state, the KOL economy has charmed China’s younger generations. Ruhnn says more than 80 percent of the fans following its KOLs are millennials, or, people born between the 1980s to early 2000s.

Ruhnn’s management team / Photo: Ruhnn via Weibo

Ruhnn, which was founded in 2016 by Feng Min, a former online shop owner, is one of the early movers to capitalize on China’s up-and-coming internet stars. The Alibaba-backed company supplies a suite of services for KOLs to connect with fans on one hand and brands and retailers on the other. That means influencers receive training to grow their fame and create digital content to market products. In 2018, Ruhn’s batch of 113 contracted KOLs generated 2 billion yuan ($300 million) in total sales and collected nearly 150 million fans across various social channels.

The firm, which is based in Alibaba’s backyard Hangzhou in eastern China, is more than a talent agency in the traditional sense. The startup operates online stores for online stars and takes care of the full ecommerce cycle, from product design, manufacturing, warehousing, delivery (which it enables through third-party logistics firms) all the way to after-sales services.

The majority of Ruhnn’s revenues comes from direct sales of fashion and lifestyle goods, but the company carved out a less asset-heavy platform model in 2017. The approach essentially lets third-party stores and merchants buy advertising services from Ruhnn’s rank of KOLs. Ruhnn has grown this segment from less than 1 percent of its total revenues in 2017 to 11.7 percent in the nine months ended December 2018.

Companies like Ruhnn, which are sometimes called KOL “facilitators” or “incubators,” not only empower internet celebrities; they are also crucial to social platforms hungry for content. Ruhnn’s stars are all over the Chinese internet, engaging users on WeChat, Weibo and Douyin, which is TikTok’s local version.

Zhang Dayi and her fans / Photo: Zhang Dayi via Weibo

Ruhnn and other ecommerce sites that rely on KOLs to sell, such as NYSE-listed, Hangzhou-based Mogu, are also tipped to shake up China’s fashion supply chain. Traditionally, brands get consumer reaction only after they put things on sale. KOL facilitators flip that process by asking influencers to try on brands’ sample garments. From there the stars will ask fans for feedback, based on which brands can adjust their design and factory orders. Ruhnn has also barcoded its inventory, so KOLs and retailers know exactly how consumer tastes are shifting in real time.

In terms of financial outlook, Ruhnn’s revenues increased from 577.9 million yuan ($86.1 million) to 947.6 million yuan between 2017 and 2018. The company is still operating in the red, incurring a net loss of about 90 million yuan, up from 40.1 million yuan a year ago.

Despite being the largest KOL facilitator by revenue according to data from Frost & Sullivan, Ruhnn faces a few hurdles. A report (in Chinese) done by Tencent shows people born after the 2000s are growing tired of being sold to by KOLs. In addition, China could tighten its tax laws around the nascent KOL industry that can have revenue implications for companies like Ruhnn.

The most pressing issue is perhaps Ruhnn’s overreliance on a small handful of top KOLs. One particular influencer, Zhang Dayi, accounted for about half of its total sales for nearly three years. That means Ruhnn is under tremendous pressure to retain Zhang, who currently serves as the firm’s marketing chief, be it through financial incentives or marketing support for the celebrity.

The problem is not unique to Ruhnn, as creators are key to all of China’s content-heavy platforms including esports streaming site Huya and short video app Douyin. These companies have spent generously to recruit KOLs and deployed big data to track user sentiments, but we all know that a celebrity’s success is at times a matter of luck.

Ruhnn, a company that enables influencers to sell through ecommerce and is plotting to change the faces of China’s fashion industry, has raised $125 million after it listed on the Nasdaq on Wednesday.

The company sold 10 million American Depositary Shares at $12.5 a pop, the midpoint of its expected range. In an earlier filing with the U.S. Securities and Exchange Commission, the Alibaba-backed firm targeted to raise $200 million from its initial public offering.

While big brands in the U.S. are turning to influencers for marketing actions, a similar trend has been brewing in China. Key opinion leaders, or KOLs as they are locally called, build up millions of followers across social media on account of their expertise in specific fields, ranging from video games to Korean fashion. Recognizing their commercial possibility, savvy talent managers jostle to sign these stars to generate ecommerce success.

Frost & Sullivan’s data shows sales generated by China’s KOLs reached 32.9 billion yuan ($4.9 billion) in 2017 and are expected to produce a healthy 40.4 percent compounded annual growth rate (CAGR) over the next five years. Though in its nascent state, the KOL economy has charmed China’s younger generations. Ruhnn says more than 80 percent of the fans following its KOLs are millennials, or, people born between the 1980s to early 2000s.

Ruhnn’s management team / Photo: Ruhnn via Weibo

Ruhnn, which was founded in 2016 by Feng Min, a former online shop owner, is one of the early movers to capitalize on China’s up-and-coming internet stars. The Alibaba-backed company supplies a suite of services for KOLs to connect with fans on one hand and brands and retailers on the other. That means influencers receive training to grow their fame and create digital content to market products. In 2018, Ruhn’s batch of 113 contracted KOLs generated 2 billion yuan ($300 million) in total sales and collected nearly 150 million fans across various social channels.

The firm, which is based in Alibaba’s backyard Hangzhou in eastern China, is more than a talent agency in the traditional sense. The startup operates online stores for online stars and takes care of the full ecommerce cycle, from product design, manufacturing, warehousing, delivery (which it enables through third-party logistics firms) all the way to after-sales services.

The majority of Ruhnn’s revenues comes from direct sales of fashion and lifestyle goods, but the company carved out a less asset-heavy platform model in 2017. The approach essentially lets third-party stores and merchants buy advertising services from Ruhnn’s rank of KOLs. Ruhnn has grown this segment from less than 1 percent of its total revenues in 2017 to 11.7 percent in the nine months ended December 2018.

Companies like Ruhnn, which are sometimes called KOL “facilitators” or “incubators,” not only empower internet celebrities; they are also crucial to social platforms hungry for content. Ruhnn’s stars are all over the Chinese internet, engaging users on WeChat, Weibo and Douyin, which is TikTok’s local version.

Zhang Dayi and her fans / Photo: Zhang Dayi via Weibo

Ruhnn and other ecommerce sites that rely on KOLs to sell, such as NYSE-listed, Hangzhou-based Mogu, are also tipped to shake up China’s fashion supply chain. Traditionally, brands get consumer reaction only after they put things on sale. KOL facilitators flip that process by asking influencers to try on brands’ sample garments. From there the stars will ask fans for feedback, based on which brands can adjust their design and factory orders. Ruhnn has also barcoded its inventory, so KOLs and retailers know exactly how consumer tastes are shifting in real time.

In terms of financial outlook, Ruhnn’s revenues increased from 577.9 million yuan ($86.1 million) to 947.6 million yuan between 2017 and 2018. The company is still operating in the red, incurring a net loss of about 90 million yuan, up from 40.1 million yuan a year ago.

Despite being the largest KOL facilitator by revenue according to data from Frost & Sullivan, Ruhnn faces a few hurdles. A report (in Chinese) done by Tencent shows people born after the 2000s are growing tired of being sold to by KOLs. In addition, China could tighten its tax laws around the nascent KOL industry that can have revenue implications for companies like Ruhnn.

The most pressing issue is perhaps Ruhnn’s overreliance on a small handful of top KOLs. One particular influencer, Zhang Dayi, accounted for about half of its total sales for nearly three years. That means Ruhnn is under tremendous pressure to retain Zhang, who currently serves as the firm’s marketing chief, be it through financial incentives or marketing support for the celebrity.

The problem is not unique to Ruhnn, as creators are key to all of China’s content-heavy platforms including esports streaming site Huya and short video app Douyin. These companies have spent generously to recruit KOLs and deployed big data to track user sentiments, but we all know that a celebrity’s success is at times a matter of luck.

Ruhnn, a company that enables influencers to sell through ecommerce and is plotting to change the faces of China’s fashion industry, has raised $125 million after it listed on the Nasdaq on Wednesday.

The company sold 10 million American Depositary Shares at $12.5 a pop, the midpoint of its expected range. In an earlier filing with the U.S. Securities and Exchange Commission, the Alibaba-backed firm targeted to raise $200 million from its initial public offering.

While big brands in the U.S. are turning to influencers for marketing actions, a similar trend has been brewing in China. Key opinion leaders, or KOLs as they are locally called, build up millions of followers across social media on account of their expertise in specific fields, ranging from video games to Korean fashion. Recognizing their commercial possibility, savvy talent managers jostle to sign these stars to generate ecommerce success.

Frost & Sullivan’s data shows sales generated by China’s KOLs reached 32.9 billion yuan ($4.9 billion) in 2017 and are expected to produce a healthy 40.4 percent compounded annual growth rate (CAGR) over the next five years. Though in its nascent state, the KOL economy has charmed China’s younger generations. Ruhnn says more than 80 percent of the fans following its KOLs are millennials, or, people born between the 1980s to early 2000s.

Ruhnn’s management team / Photo: Ruhnn via Weibo

Ruhnn, which was founded in 2016 by Feng Min, a former online shop owner, is one of the early movers to capitalize on China’s up-and-coming internet stars. The Alibaba-backed company supplies a suite of services for KOLs to connect with fans on one hand and brands and retailers on the other. That means influencers receive training to grow their fame and create digital content to market products. In 2018, Ruhn’s batch of 113 contracted KOLs generated 2 billion yuan ($300 million) in total sales and collected nearly 150 million fans across various social channels.

The firm, which is based in Alibaba’s backyard Hangzhou in eastern China, is more than a talent agency in the traditional sense. The startup operates online stores for online stars and takes care of the full ecommerce cycle, from product design, manufacturing, warehousing, delivery (which it enables through third-party logistics firms) all the way to after-sales services.

The majority of Ruhnn’s revenues comes from direct sales of fashion and lifestyle goods, but the company carved out a less asset-heavy platform model in 2017. The approach essentially lets third-party stores and merchants buy advertising services from Ruhnn’s rank of KOLs. Ruhnn has grown this segment from less than 1 percent of its total revenues in 2017 to 11.7 percent in the nine months ended December 2018.

Companies like Ruhnn, which are sometimes called KOL “facilitators” or “incubators,” not only empower internet celebrities; they are also crucial to social platforms hungry for content. Ruhnn’s stars are all over the Chinese internet, engaging users on WeChat, Weibo and Douyin, which is TikTok’s local version.

Zhang Dayi and her fans / Photo: Zhang Dayi via Weibo

Ruhnn and other ecommerce sites that rely on KOLs to sell, such as NYSE-listed, Hangzhou-based Mogu, are also tipped to shake up China’s fashion supply chain. Traditionally, brands get consumer reaction only after they put things on sale. KOL facilitators flip that process by asking influencers to try on brands’ sample garments. From there the stars will ask fans for feedback, based on which brands can adjust their design and factory orders. Ruhnn has also barcoded its inventory, so KOLs and retailers know exactly how consumer tastes are shifting in real time.

In terms of financial outlook, Ruhnn’s revenues increased from 577.9 million yuan ($86.1 million) to 947.6 million yuan between 2017 and 2018. The company is still operating in the red, incurring a net loss of about 90 million yuan, up from 40.1 million yuan a year ago.

Despite being the largest KOL facilitator by revenue according to data from Frost & Sullivan, Ruhnn faces a few hurdles. A report (in Chinese) done by Tencent shows people born after the 2000s are growing tired of being sold to by KOLs. In addition, China could tighten its tax laws around the nascent KOL industry that can have revenue implications for companies like Ruhnn.

The most pressing issue is perhaps Ruhnn’s overreliance on a small handful of top KOLs. One particular influencer, Zhang Dayi, accounted for about half of its total sales for nearly three years. That means Ruhnn is under tremendous pressure to retain Zhang, who currently serves as the firm’s marketing chief, be it through financial incentives or marketing support for the celebrity.

The problem is not unique to Ruhnn, as creators are key to all of China’s content-heavy platforms including esports streaming site Huya and short video app Douyin. These companies have spent generously to recruit KOLs and deployed big data to track user sentiments, but we all know that a celebrity’s success is at times a matter of luck.

Ruhnn, a company that enables influencers to sell through ecommerce and is plotting to change the faces of China’s fashion industry, has raised $125 million after it listed on the Nasdaq on Wednesday.

The company sold 10 million American Depositary Shares at $12.5 a pop, the midpoint of its expected range. In an earlier filing with the U.S. Securities and Exchange Commission, the Alibaba-backed firm targeted to raise $200 million from its initial public offering.

While big brands in the U.S. are turning to influencers for marketing actions, a similar trend has been brewing in China. Key opinion leaders, or KOLs as they are locally called, build up millions of followers across social media on account of their expertise in specific fields, ranging from video games to Korean fashion. Recognizing their commercial possibility, savvy talent managers jostle to sign these stars to generate ecommerce success.

Frost & Sullivan’s data shows sales generated by China’s KOLs reached 32.9 billion yuan ($4.9 billion) in 2017 and are expected to produce a healthy 40.4 percent compounded annual growth rate (CAGR) over the next five years. Though in its nascent state, the KOL economy has charmed China’s younger generations. Ruhnn says more than 80 percent of the fans following its KOLs are millennials, or, people born between the 1980s to early 2000s.

Ruhnn’s management team / Photo: Ruhnn via Weibo

Ruhnn, which was founded in 2016 by Feng Min, a former online shop owner, is one of the early movers to capitalize on China’s up-and-coming internet stars. The Alibaba-backed company supplies a suite of services for KOLs to connect with fans on one hand and brands and retailers on the other. That means influencers receive training to grow their fame and create digital content to market products. In 2018, Ruhn’s batch of 113 contracted KOLs generated 2 billion yuan ($300 million) in total sales and collected nearly 150 million fans across various social channels.

The firm, which is based in Alibaba’s backyard Hangzhou in eastern China, is more than a talent agency in the traditional sense. The startup operates online stores for online stars and takes care of the full ecommerce cycle, from product design, manufacturing, warehousing, delivery (which it enables through third-party logistics firms) all the way to after-sales services.

The majority of Ruhnn’s revenues comes from direct sales of fashion and lifestyle goods, but the company carved out a less asset-heavy platform model in 2017. The approach essentially lets third-party stores and merchants buy advertising services from Ruhnn’s rank of KOLs. Ruhnn has grown this segment from less than 1 percent of its total revenues in 2017 to 11.7 percent in the nine months ended December 2018.

Companies like Ruhnn, which are sometimes called KOL “facilitators” or “incubators,” not only empower internet celebrities; they are also crucial to social platforms hungry for content. Ruhnn’s stars are all over the Chinese internet, engaging users on WeChat, Weibo and Douyin, which is TikTok’s local version.

Zhang Dayi and her fans / Photo: Zhang Dayi via Weibo

Ruhnn and other ecommerce sites that rely on KOLs to sell, such as NYSE-listed, Hangzhou-based Mogu, are also tipped to shake up China’s fashion supply chain. Traditionally, brands get consumer reaction only after they put things on sale. KOL facilitators flip that process by asking influencers to try on brands’ sample garments. From there the stars will ask fans for feedback, based on which brands can adjust their design and factory orders. Ruhnn has also barcoded its inventory, so KOLs and retailers know exactly how consumer tastes are shifting in real time.

In terms of financial outlook, Ruhnn’s revenues increased from 577.9 million yuan ($86.1 million) to 947.6 million yuan between 2017 and 2018. The company is still operating in the red, incurring a net loss of about 90 million yuan, up from 40.1 million yuan a year ago.

Despite being the largest KOL facilitator by revenue according to data from Frost & Sullivan, Ruhnn faces a few hurdles. A report (in Chinese) done by Tencent shows people born after the 2000s are growing tired of being sold to by KOLs. In addition, China could tighten its tax laws around the nascent KOL industry that can have revenue implications for companies like Ruhnn.

The most pressing issue is perhaps Ruhnn’s overreliance on a small handful of top KOLs. One particular influencer, Zhang Dayi, accounted for about half of its total sales for nearly three years. That means Ruhnn is under tremendous pressure to retain Zhang, who currently serves as the firm’s marketing chief, be it through financial incentives or marketing support for the celebrity.

The problem is not unique to Ruhnn, as creators are key to all of China’s content-heavy platforms including esports streaming site Huya and short video app Douyin. These companies have spent generously to recruit KOLs and deployed big data to track user sentiments, but we all know that a celebrity’s success is at times a matter of luck.

Ruhnn, a company that enables influencers to sell through ecommerce and is plotting to change the faces of China’s fashion industry, has raised $125 million after it listed on the Nasdaq on Wednesday.

The company sold 10 million American Depositary Shares at $12.5 a pop, the midpoint of its expected range. In an earlier filing with the U.S. Securities and Exchange Commission, the Alibaba-backed firm targeted to raise $200 million from its initial public offering.

While big brands in the U.S. are turning to influencers for marketing actions, a similar trend has been brewing in China. Key opinion leaders, or KOLs as they are locally called, build up millions of followers across social media on account of their expertise in specific fields, ranging from video games to Korean fashion. Recognizing their commercial possibility, savvy talent managers jostle to sign these stars to generate ecommerce success.

Frost & Sullivan’s data shows sales generated by China’s KOLs reached 32.9 billion yuan ($4.9 billion) in 2017 and are expected to produce a healthy 40.4 percent compounded annual growth rate (CAGR) over the next five years. Though in its nascent state, the KOL economy has charmed China’s younger generations. Ruhnn says more than 80 percent of the fans following its KOLs are millennials, or, people born between the 1980s to early 2000s.

Ruhnn’s management team / Photo: Ruhnn via Weibo

Ruhnn, which was founded in 2016 by Feng Min, a former online shop owner, is one of the early movers to capitalize on China’s up-and-coming internet stars. The Alibaba-backed company supplies a suite of services for KOLs to connect with fans on one hand and brands and retailers on the other. That means influencers receive training to grow their fame and create digital content to market products. In 2018, Ruhn’s batch of 113 contracted KOLs generated 2 billion yuan ($300 million) in total sales and collected nearly 150 million fans across various social channels.

The firm, which is based in Alibaba’s backyard Hangzhou in eastern China, is more than a talent agency in the traditional sense. The startup operates online stores for online stars and takes care of the full ecommerce cycle, from product design, manufacturing, warehousing, delivery (which it enables through third-party logistics firms) all the way to after-sales services.

The majority of Ruhnn’s revenues comes from direct sales of fashion and lifestyle goods, but the company carved out a less asset-heavy platform model in 2017. The approach essentially lets third-party stores and merchants buy advertising services from Ruhnn’s rank of KOLs. Ruhnn has grown this segment from less than 1 percent of its total revenues in 2017 to 11.7 percent in the nine months ended December 2018.

Companies like Ruhnn, which are sometimes called KOL “facilitators” or “incubators,” not only empower internet celebrities; they are also crucial to social platforms hungry for content. Ruhnn’s stars are all over the Chinese internet, engaging users on WeChat, Weibo and Douyin, which is TikTok’s local version.

Zhang Dayi and her fans / Photo: Zhang Dayi via Weibo

Ruhnn and other ecommerce sites that rely on KOLs to sell, such as NYSE-listed, Hangzhou-based Mogu, are also tipped to shake up China’s fashion supply chain. Traditionally, brands get consumer reaction only after they put things on sale. KOL facilitators flip that process by asking influencers to try on brands’ sample garments. From there the stars will ask fans for feedback, based on which brands can adjust their design and factory orders. Ruhnn has also barcoded its inventory, so KOLs and retailers know exactly how consumer tastes are shifting in real time.

In terms of financial outlook, Ruhnn’s revenues increased from 577.9 million yuan ($86.1 million) to 947.6 million yuan between 2017 and 2018. The company is still operating in the red, incurring a net loss of about 90 million yuan, up from 40.1 million yuan a year ago.

Despite being the largest KOL facilitator by revenue according to data from Frost & Sullivan, Ruhnn faces a few hurdles. A report (in Chinese) done by Tencent shows people born after the 2000s are growing tired of being sold to by KOLs. In addition, China could tighten its tax laws around the nascent KOL industry that can have revenue implications for companies like Ruhnn.

The most pressing issue is perhaps Ruhnn’s overreliance on a small handful of top KOLs. One particular influencer, Zhang Dayi, accounted for about half of its total sales for nearly three years. That means Ruhnn is under tremendous pressure to retain Zhang, who currently serves as the firm’s marketing chief, be it through financial incentives or marketing support for the celebrity.

The problem is not unique to Ruhnn, as creators are key to all of China’s content-heavy platforms including esports streaming site Huya and short video app Douyin. These companies have spent generously to recruit KOLs and deployed big data to track user sentiments, but we all know that a celebrity’s success is at times a matter of luck.

There are a lot of people who never thought they’d see the day venture capitalists would funnel millions into femtech businesses, direct-to-consumer tampon retailers no less. But that’s our new reality and Cora is proof.

San Francisco-based Cora, which develops and sells organic tampons, pads and other personal care products, has just closed a $7.5 million Series A led by Harbinger Ventures. Cora is one of many femtech startups to raise funding this week alone, in what is turning out to be a red-hot year for VC investment in the space.

Femtech, defined as any software, diagnostics, products and services that leverage technology to improve women’s health, has attracted at least $241 million in VC funding so far this year, according to PitchBook. That puts the sector on pace to secure nearly $1 billion in investment by year-end, greatly surpassing last year’s record of $650 million. For more historical context, startups in the space brought in only $62 million in 2012, $225 million in 2014 and $231 million in 2016.

“Investors have realized there is a huge pent-up demand in the market for healthier products for women,” Cora co-founder Molly Hayward tells TechCrunch. “The way in which the VC world is structured, there just has not been a lot of representation. It’s really difficult to understand the value of a product you aren’t ever going to use or to understand a problem you aren’t ever going to have, particularly around period care. This isn’t something we were talking about as a society five years ago.”

The four-year-old startup operates a little differently than your run-of-the-mill D2C company. Like TOMS, the popular footwear brand, Cora donates a month’s supply of products for every month’s supply sold. To date, Cora has donated 5 million pads to girls in India and Kenya and 100,000 products to women in the U.S.

“To me, [Cora] was this incredible, holistic opportunity to change the way that women experience their period,” Hayward said.

Investors must be excited about Cora’s growth. Though she didn’t disclose specific numbers, Hayward says the brand has expanded 400 percent year-over-year, a metric they are expecting to sustain with this new bout of funding. Cora’s products are sold on a subscription basis, with prices ranging from $8 per month for six tampons to $16 per month for 24. For those unfamiliar with the costs of such products, $8 for six tampons comes at quite the premium. A box of 50 Playtex tampons, for example, retails for around $9.

In Cora’s case, customers are shelling out extra cash for millennial-inspired branding, a soothing unboxing experience and a general ease of access to its products, as well as Cora’s organic, hypoallergenic and compostable materials, which aren’t characteristic of many similar products on the market.

Cora plans to use the capital to put more of its items in Target stores, where it already sells its tampons and pads, and expand its portfolio of products. As part of the funding, Cora has added three more women to its board of directors: Harbinger founder and managing partner Megan Bent; Lisa Bougie, the former GM of Stitch Fix; and Andrea Freedman, the former chief financial officer of Method. Its board is now 80 percent female.

The days when you could simply grow a basil plant from a seed by placing it on your windowsill and watering it regularly are gone — there’s no point now that machine learning-optimized hydroponic “cyber-agriculture” has produced a superior plant with more robust flavors. The future of pesto is here.

This research didn’t come out of a desire to improve sauces, however. It’s a study from MIT’s Media Lab and the University of Texas at Austin aimed at understanding how to both improve and automate farming.

In the study, published today in PLoS One, the question being asked was whether a growing environment could find and execute a growing strategy that resulted in a given goal — in this case, basil with stronger flavors.

Such a task is one with numerous variables to modify — soil type, plant characteristics, watering frequency and volume, lighting, and so on — and a measurable outcome: concentration of flavor-producing molecules. That means it’s a natural fit for a machine learning model, which from that variety of inputs can make a prediction as to which will produce the best output.

“We’re really interested in building networked tools that can take a plant’s experience, its phenotype, the set of stresses it encounters, and its genetics, and digitize that to allow us to understand the plant-environment interaction,” explained MIT’s Caleb Harper in a news release. The better you understand those interactions, the better you can design the plant’s lifecycle, perhaps increasing yield, improving flavor, or reducing waste.

In this case the team limited the machine learning model to analyzing and switching up the type and duration of light experienced by the plants, with the goal of increasing flavor concentration.

A first round of nine plants had light regimens designed by hand based on prior knowledge of what basil generally likes. The plants were harvested and analyzed. Then a simple model was used to make similar but slightly tweaked regimens that took the results of the first round into account. Then a third, more sophisticated model was created from the data and given significantly more leeway in its ability to recommend changes to the environment.

To the researchers’ surprise, the model recommended a highly extreme measure: Keep the plant’s UV lights on 24/7.

Naturally this isn’t how basil grows in the wild, since, as you may know, there are few places where the sun shines all day long and all night strong. And the arctic and antarctic, while fascinating ecosystems, aren’t known for their flavorful herbs and spices.

Nevertheless the “recipe” of keeping the lights on was followed (it was an experiment, after all), and incredibly, this produced a massive increase in flavor molecules, doubling the amount found in control plants.

“You couldn’t have discovered this any other way,” said co-author John de la Parra. “Unless you’re in Antarctica, there isn’t a 24-hour photoperiod to test in the real world. You had to have artificial circumstances in order to discover that.”

But while a more flavorful basil is a welcome result, it’s not really the point. The team is more happy that the method yielded good data, validating the platform and software they used.

“You can see this paper as the opening shot for many different things that can be applied, and it’s an exhibition of the power of the tools that we’ve built so far,” said de la Parra. “With systems like ours, we can vastly increase the amount of knowledge that can be gained much more quickly.”

If we’re going to feed the world, it’s not going to be done with amber waves of grain, i.e. with traditional farming methods. Vertical, hydroponic, computer-optimized — we’ll need all these advances and more to bring food production into the 21st century.