Tencent Backed Video Streaming Startup, Kuaishou, Nearing $1B in Funding at $18B Valuation

Kuaishou, a Chinese live-video streaming start-up, whose name means “fast hand” in Chinese, is nearing the end of a $1 billion funding round led by Tencent, and has plans to list later this year, according to Nasdaq. Kuaishou is emerging from the latest funding round with a $18 billion valuation. It has attracted some heavy hitters, including Sequoia Capital China.

Kuaishou did not comment to news outlets, nor did Tencent or Sequoia China. The three sources who divulged the information declined to be named.

However, they did say that Kuaishou is considering an initial public offering (IPO) as soon as the second quarter of this year. The source said it prefers to list in Hong Kong, and added that the IPO has not yet been finalized. Recent IPOs in Hong Kong have fared well, according to Reuters, “boosting its appeal as a venue for such floats”.

Live streaming in China has seen rapid growth over the past year, pulling in investment led by tech giants Tencent, Baidu and Alibaba who want to add live streaming to their existing services in social networking, gaming and e-commerce. It barely existed as a sector in China three years ago; however in 2016, it pulled in revenues of over 30 billion yuan ($4.74 billion). China Renaissance Securities, a Chinese investment bank, has said it expects it will triple that by 2020, which puts it on track to overtake cinema box office receipts.

Kuaishou currently is China’s most popular video streaming app and commands 20 per cent market share, according to a recent report by Jiguang, a Chinese data provider. It has over 100 million monthly active users and intends to triple the number this year, according to one of the sources.

Another person said the startup intends to extend is global footprint, starting in Southeast Asia. They said that the recent funding round would in part be used to invest in its future outbound investment and deals.

Five of the world’s ten biggest VC deals were in Chinese-based companies last year, while the US only accounted for two, according to researcher Preqin. Investors are particularly narrowing in on startups backed by Alibaba or Tencent.

“After a period of jitters over where the Chinese economy was going, investors seem to have gotten comfortable with the idea the world isn’t coming to an end and have started to see some impressive-looking numbers,” says Mark Natkin, managing director of Beijing-based Marbridge Consulting.

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