China-based short-form video platform Kuaishou has entered discussions with internet group Tencent to raise between $1bn and $1.5bn at a $25bn pre-money valuation, IPO Zaozhidao reported today.
Kuaishou runs an online platform where users can stream short-form videos. It recorded 200 million daily active users in June this year, in comparison to 7.5 million for Tencent-owned competitor Weishi and 320 million for China’s market leader, Douyin.
The platform was initially known for reckless stunts performed and uploaded by a user base that tilts young and rural, but it has successfully grown and achieved success in neighbouring markets such as Russia, Belarus and South Korea.
Tencent would ideally like to invest $2.5bn, according to IPO Zaozhidao, which said another prospective investor – a large undisclosed international entity – was put off by Tencent’s attempts to acquire a stake of between 30% and 40% in Kuaishou, as reported by Beijing News last week.
The round would come after Kuaishou received $350m in an early 2017 round reported at the time to have been led by Tencent, though recent coverage suggests the corporate provided the full amount at a $2.5bn valuation.
Kuaishou and Tencent have recently heightened their relationship, with Tencent having begun permitting users of its WeChat messaging app to include links to Kuaishou videos.
Internet company Baidu and private equity firm China Media Capital had reportedly invested an eight-figure dollar amount in the company at a $2bn valuation in 2016, following a $10m series B round featuring Sequoia Capital China and DCM Ventures two years earlier.
