China-based online video platform iQiyi is considering launching a US IPO in early 2018 that would give internet group Baidu an exit, Bloomberg reported today, citing two people familiar with the matter.
The company, in which Baidu holds a majority stake, would seek a valuation of between $8bn and $10bn in the IPO, and it plans to shortly begin discussions with banks over an offering.
Founded in 2010 and initially known as Qiyi, iQiyi runs a video streaming platform that had more than 480 million monthly active users as of the end of 2016, according to Baidu.
The company licenses content from providers including US platform Netflix, but any funds raised through an IPO would likely go to the production of additional content.
Baidu joined private equity firm Providence Equity Partners to invest an undisclosed sum in the startup in 2010, and it bought enough shares from Providence in 2012 to acquire a majority stake.
Consumer electronics provider Xiaomi and venture capital firm Shunwei Capital supplied $300m in equity financing for iQiyi two years later, a month after Baidu had pledged to increase its own investment. Baidu invested $100m, Bloomberg has reported.
The company subsequently raised $1.53bn in a February 2017 round that included $300m from Baidu, which retained a majority share of the company through the deal.
IDG Capital, Sequoia Capital and Hillhouse Capital also took part in the February round, as did the Everbright-IDG Industrial Fund, Boyu Capital and Run Liang Tai Fund, according to the South China Morning Post.