Tencent Holdings Ltd’s (騰訊) investment in Chinese video streaming service Kuaishou (快手) values the start-up at about US$3 billion, people with knowledge of the matter said.
Kuaishou has raised US$350 million in a funding round, the company said yesterday in an e-mailed statement.
The investment comes ahead of a potential initial public offering (IPO) of Baidu Inc (百度)-backed Kuaishou, said the people, who asked not to be identified because the information is private.
Tech giants from Tencent to Alibaba Group Holding Ltd (阿里巴巴) are investing billions of US dollars in video content and services, hoping to convert time spent on these platforms into online ad revenue.
Kuaishou is a video platform in the same vein as Instagram or Periscope. It has more than 50 million daily active users who watch short clips and live broadcasts of everything from noodle-slurping to physical feats of prowess, with more than 5 million such videos uploaded a day.
Unlike rival services run by YY Inc (歡聚時代科技) or Momo Inc (陌陌科技), most of its viewers and uploaders live in the countryside or smaller communities.
It gained an early reputation as the Jackass of China, thanks to the videos of people performing stunts and physical antics once prevalent on the platform.
However, the majority of clips today capture daily life in farming communities and the factory parks of lower-income Chinese cities, thanks in part to the censors who remove sensitive content.
A browse through Kuaishou’s feeds reveals videos of migrant workers blowing off steam in karaoke parlors and young teens practicing dance routines. Homeless residents are filmed eating donated food and there are countless clips of babies and animals.
The company is now expanding abroad, hoping its expertise in targeting rural communities will help it gain traction in developing markets such as Indonesia and Thailand.
“It’s a dynamic Chinese mobile Internet product that resonates with people,” Tencent chairman Ma Huateng (馬化騰) said in the statement.
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