Kuaishou Technology (快手), the operator of China’s most popular video service after ByteDance Ltd’s (字節跳動) Douyin (抖音), is seeking to raise as much as US$5.4 billion in the world’s biggest Internet initial public offering (IPO) since Uber Technologies Inc.
The short video start-up, backed by Tencent Holdings Ltd (騰訊), is selling 365 million shares at HK$105 to HK$115 each, according to terms of the deal obtained by Bloomberg News.
Kuaishou, which means “fast hand,” was yesterday to start taking investor orders through Friday, and is slated to list on Friday next week in Hong Kong.
The company is attempting the world’s biggest Internet IPO since Uber’s US$8.1 billion US share sale in May 2019, according to data compiled by Bloomberg.
The Chinese start-up’s IPO would also give another boost to Hong Kong’s already hot capital market and could become Asia’s largest since Budweiser Brewing Co APAC Ltd’s US$5.8 billion float almost two years ago.
Kuaishou executives yesterday revealed monthly active users on its main app had reached 481.4 million, while average daily time spent had crossed the 100-minute mark this year.
Cofounder Su Hua (宿華) said that his company was pursuing future growth by applying its popular video formats to a range of online services like shopping.
“We are exploring livestreaming in local life services and knowledge sharing,” the 38-year-old former Google engineer told investors on a conference call. “We’ll also try to use short videos and livestreaming, both based on the fan-host relationship, to transform one industry after another. That’s a driving force for our future growth.”
The Kuaishou offering has attracted 10 cornerstone investors, who agreed to subscribe for US$2.45 billion of stock, based on the midpoint of the marketed range. The lineup includes The Capital Group, Temasek Holdings Pte, GIC Pte, BlackRock Inc and Abu Dhabi Investment Authority, the terms show.
The cornerstone investors have agreed to hold stock for six months in exchange for early, guaranteed allocation.
The valuation of Kuaishou could more than double after its Hong Kong IPO. A top-end pricing would value the Chinese firm at US$60.9 billion, up from the US$28.6 billion it achieved in a funding round last year, Pitchbook said.
Even at the low end of the range, Kuaishou would still be valued at US$55.6 billion.
Kuaishou had about 262 million average daily active users as of September, its prospectus showed. That is still less than half the 600 million on Douyin, the Chinese version of TikTok.
Still, Kuaishou’s revenues climbed 49 percent to 40.7 billion yuan (US$6.3 billion) in the first nine months of last year, after it ratcheted up monetization efforts through advertising and e-commerce.
While it offers free access to its main platform, the start-up takes a cut of the tips users give to their favorite livestreamers who perform viral challenges, lip-synch to the latest pop songs and play video games.
Tencent has about a 21.6 percent stake in Kuaishou, and other backers include venture capital firms DCM, DST Global and Sequoia Capital China, the prospectus showed.
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