Soul, a social platform known for its emotion-driven virtual goods business model, has officially submitted its listing application to the Hong Kong Stock Exchange. This marks the company's fourth IPO attempt, following previous efforts in the U.S. in 2021 and two unsuccessful bids in Hong Kong in 2022 and 2023. This time, Soul is positioning itself as the "first AI-powered immersive emotional social platform."
Founded in 2016 by Zhang Lu with the vision of creating "a spiritual haven for young people," Soul differentiates itself from mainstream social platforms like WeChat and QQ by focusing on anonymous interactions among strangers. The app uses algorithmic matching based on user interests, allowing communication without revealing real names or profile pictures. By August 2025, Soul had amassed approximately 390 million registered users, with daily active users reaching 11 million, 78.7% of whom belong to Generation Z.
Soul's revenue primarily comes from its "emotional value services," accounting for around 90% of total income. These services include virtual items and membership privileges, such as customized avatars, virtual gifts, and enhanced visibility. Users purchase these features using Soul coins, priced between RMB 0.1 to 0.2 each. From 2022 to 2024, revenue from these services grew from RMB 1.519 billion to RMB 1.967 billion, with the first eight months of 2025 generating RMB 1.528 billion.
Despite high gross margins of 83.7% in 2024 and 81.5% in the first eight months of 2025, Soul faces challenges due to its heavy reliance on a single revenue stream. The company acknowledges in its prospectus that future growth in this segment is uncertain. Additionally, substantial marketing expenditures—RMB 8.44 billion, RMB 7.52 billion, and RMB 8.89 billion from 2022 to 2024, respectively—have impacted profitability. Adjusted net profits for these years were RMB -21.9 million, RMB 361 million, and RMB 337 million, with a net loss of RMB 36 million in the first eight months of 2025.
User growth has also stagnated, with monthly active users (MAUs) dropping from 29.4 million in 2022 to 26.2 million in 2023 and 2024, only partially recovering to 28 million by August 2025. Technological investments, particularly in AI, remain significant, with R&D costs totaling RMB 4.72 billion, RMB 4.53 billion, and RMB 5.46 billion over the same period.
Tencent Holdings (TENCENT) is Soul's largest external shareholder, holding a 49.9% stake but not participating in daily operations. Other notable investors include miHoYo (5.47%), Genesis Capital (5.34%), and Morningside Ventures (3.77%). IPO proceeds are earmarked for AI development, global expansion, and content creation.
However, Soul's anonymity feature, while a key attraction, has led to compliance issues, including scams and fraudulent activities. Over 6,070 complaints on consumer platforms highlight problems like fraud, misleading promotions, and account suspensions. The competitive landscape further complicates matters, with rivals like Momo and Tantan dominating the market through live streaming and membership models.
As Soul navigates these challenges, its ability to sustain growth and profitability remains uncertain amidst rising competition and regulatory scrutiny.