Internet group Tencent is set to lead a $1bn funding round for China-based social media app Kuaishou that will value it at $18bn, Reuters reported today.
The round’s other investors include venture capital firm Sequoia Capital China and the funding is being raised in advance of an initial public offering the company intends to launch later this year, according to three people familiar with the matter.
Kuaishou runs a mobile app that enables users to upload and share photos and videos, and livestream videos to their followers, who can reward them with virtual gifts. The company has 100 million active users but aims to triple that figure this year, one of the sources said.
A large part of the funding will be used for international growth, as overseas markets currently account for less than 5% of the company’s business. Southeast Asia is the priority for that growth, with the incoming capital set to fund strategic investments.
The prospective IPO is expected to take place in the second half of 2018 and Hong Kong is currently the likeliest destination, one source told Reuters. TechCrunch reported in early 2017 that Kuaishou planned to float in the US during the year, but it never filed for the offering.
Kuaishou’s last funding came in the form of a $350m round led by Tencent in March 2017. Internet company Baidu and China Media Capital supplied an eight-figure dollar amount of series C capital for the company in 2016, after Sequoia China and DCM Ventures had invested $10m in 2014.
China’s livestreaming and short-form video segment has been an emerging force in the startup space. Mobile media app developer Bytedance acquired Musical.ly for up to $1bn and invested $50m in Live.me last month, while Chushou recently closed a series D round that took its total funding to $120m.