Kuaishou Technology (快手) has filed an application for a Hong Kong initial public offering (IPO), heading toward a listing that could raise as much as US$5 billion and beat larger rival ByteDance Ltd (字節跳動) to market.
Kuaishou, or “fast hand,” reported revenue climbed 48 percent to 25.3 billion yuan (US$3.8 billion) in the first half of the year, underlining the scorching pace of growth of a Chinese short video market.
The Tencent Holdings Ltd (騰訊)-backed startup is angling for a valuation of US$50 billion in an offering as soon as the end of this year, almost twice its current price tag, people familiar with the matter said, asking not to be identified because the deal has not been finalized.
Photo: EPA-EFE
Kuaishou’s impending debut raises hopes Hong Kong would continue to attract listings from prominent Internet companies, despite the derailment of a highly anticipated debut by Jack Ma’s (馬雲) Ant Group Co (螞蟻集團).
ByteDance itself is said to be in discussions to raise US$2 billion before listing some of its businesses in Hong Kong, potentially as early as next year.
The two represent a generation of private Chinese start-ups that have risen to the fore thanks to a surge in short video, challenging the dominance of Tencent and Alibaba Group Holding Ltd (阿里巴巴).
Kuaishou established its popularity among users in smaller cities and rural areas, with people streaming slices of everyday life from harvesting corn to slurping noodles.
It has since expanded to audiences in bigger cities, hosting content ranging from people playing video games to teenagers lip-syncing songs, much like ByteDance’s TikTok and Douyin (抖音).
Access to Kuaishou’s main app is free, with revenue generated from a cut of the tips users give their favorite live-streaming performers.
At US$50 billion, the company — last valued by Pitchbook at US$28.6 billion after a February funding round — would surpass SpaceX and Airbnb to become the world’s third-most valuable start-up, according to CB Insights.
Morgan Stanley, Bank of America Corp and China Renaissance Holdings Ltd (華星資本) are joint sponsors of Kuaishou’s proposed IPO, according to pre-listing documents posted on the Hong Kong Stock Exchange’s Web site on Thursday.
Tencent has a 21.6 percent stake in Kuaishou, and other backers include venture capital firms DCM, DST Global and Sequoia Capital China, according to the filing.
CEO Su Hua (宿華) has 12.6 percent, while founder Cheng Yixiao (程一笑) has 10 percent.
The company has been increasingly expanding into advertising and e-commerce. Its apps had 776 million average monthly active users in the first half of the year, the filing showed. Active users spent an average of more than 85 minutes daily on its main app.
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