China-based video streaming service iQiyi, in which internet group Baidu is a majority investor, filed yesterday to raise up to $1.5bn in an initial public offering in the US.
Founded in 2010 and originally known as Qiyi, iQiyi runs an online video platform that combines a free YouTube-like service made up of user-generated content with a premium Netflix-like service that allows paying subscribers to view licensed and original content.
About 50.8 million subscribers have signed up to the platform, which has an average of 126 million daily active users on mobile and 53.7 million on PCs.
The company made a $574m net loss in 2017 from approximately $2.67bn in revenue. It plans to put 50% of the IPO proceeds into content and 10% into improving its core technology.
Baidu has held a majority stake in iQiyi since 2012 when it acquired shares from Providence Equity Partners, the private equity firm it partnered for an investment in the company two years earlier.
Baidu provided another $100m of funding in 2014, shortly before consumer electronics manufacturer Xiaomi’s corporate venturing unit, Xiaomi Ventures, joined venture capital firm Shunwei Capital to invest $300m in iQiyi.
The company raised $1.53bn from Baidu, which contributed $300m, IDG Capital, Sequoia Capital, Hillhouse Capital, Everbright-IDG Industrial Fund, Boyu Capital and Run Liang Tai Fund in February 2017.
Baidu maintains a 69.6% stake in iQiyi, while Xiaomi owns 8.4% and HH RSV-V Holdings, a holding vehicle for hedge fund manager Hillhouse, has 5.7%.
Goldman Sachs (Asia), Credit Suisse Securities (USA), Merrill Lynch, Pierce, Fenner & Smith, China Renaissance Securities (Hong Kong), Citigroup Global Markets and UBS Securities have been appointed underwriters for the offering.