Recently, there was a rumor: IDG Capital and Easy Fundraising executives have had multiple contacts with Water Drop Fundraising Company, urging the two companies to merge. After the merger, the new company's ratio will be 65% for Water Drop Fundraising Company and 35% for Easy Fundraising. The news of the merger between Easy Fundraising and Water Drop Fundraising Company was also reported earlier, in the merger rumor last December, the merger ratio was 3 for Easy Fundraising and 2 for Water Drop Fundraising Company.

The truth of the rumor is still uncertain, but from the following four aspects, Liu Kuang believes that the possibility of the two merging is relatively high.

1. The dividend period is coming to an end, and the internet industry is ushering in a wave of mergers and acquisitions.

The business logic of the internet industry is different from that of traditional industries. The internet industry mainly sells services, and regardless of user scale, the cost of products is generally similar. Without the offline entity cost platform model, the marginal cost of acquiring market share approaches zero. Therefore, in the end, the industry pattern often tends to a few strong players, or the top two companies merge to gain a monopoly position. As Amazon founder Bezos said, "There are no medium-sized enterprises in the internet; either grow big or exit."

In a field, the top two companies will either see one eliminated in competition or merge, which has almost become a law of development in the internet industry. Looking back at the development history of the internet industry, there are many such examples, such as Didi and Kuaidi, 58 and Ganji, Meituan and Dianping, Ctrip and Qunar, all of which have gone through the process of competition to merger.

Water Drop Fundraising Company and Easy Fundraising are also the top two benchmark enterprises in the industry, with similar overall business, both being fundraising + mutual assistance + insurance. Water Drop Fundraising Company has three businesses: Water Drop Mutual Assistance, Water Drop Fundraising, and Water Drop Insurance, while Easy Fundraising has four businesses: Easy Fundraising, Easy Mutual Assistance, Easy Insurance, and Easy Charity. The brand awareness of Water Drop Fundraising Company and Easy Fundraising is comparable, with very high attention among user groups. As of April 2, the registered users of Water Drop Fundraising Company have reached 360 million, and the registered users of Easy Fundraising reached 201 million as of March 8 this year, firmly ranking first and second in the industry.

Moreover, the mobile internet dividend period is coming to an end, and various industries have shifted from money-burning competition to refined user operation, ushering in a wave of mergers and acquisitions in the internet industry. From this perspective, the possibility of Water Drop Fundraising Company and Easy Fundraising merging is relatively high.

2. It is better for two strong competitors to unite than to fight.

Although Water Drop Fundraising Company and Easy Fundraising have similar businesses, their market strategies are completely different, and merging can achieve complementary advantages.

Easy Fundraising was established earlier and involves a more diverse range of fundraising types. In addition to major illness fundraising, there are also dream fundraising, trial pre-sale, and other fundraising projects. The diversification of fundraising services allowed Easy Fundraising to harvest a large number of users in the early stages. However, the platform's review capability is slightly insufficient, which has become a bottleneck for Easy Fundraising's growth. According to Baidu Index, Easy Fundraising has entered a growth bottleneck period, and the downward trend is quite obvious.