Internet company Tencent agreed yesterday to provide approximately $462m in series B funding for Huya, a China-based live game streaming spinout from social media platform YY.
The deal was announced within hours of news that Tencent had invested $630m in Huya’s main rival, Douyu. The size of the stake Tencent has acquired in Huya was not revealed, but the company has confirmed that YY remains its majority investor.
Huya’s online livestreaming platform allows users to stream their gaming to viewers in real time. It had more than 66 million monthly active users, including 5.7 million paying users, as of the first half of 2017.
The platform was launched in 2014 and YY formally spun it out in May 2017, when it raised $75m in a series A round led by China Ping An Insurance Overseas (Holdings), an investment vehicle for insurance group Ping An.
The series A round also featured investment adviser Banyan Partners and venture capital firm Morningside Ventures as well as Engage Capital, YY chairman and chief executive David Xueling Li and Huya’s CEO, Rongjie Dong.
Xueling Li said yesterday: “This investment will reinforce and solidify Huya as the leader in the fast-growing game livestreaming market in China.
“Supported by Tencent’s strong capabilities in game development, distribution and operation, Huya will march into a new era of building and maintaining the largest game livestreaming and eSports community for young generations in China. Meanwhile, Huya remains a major asset of YY, continuously bringing significant value for YY shareholders.”
Although gaming is not its core market, Tencent is the largest game publisher by revenue in the world, according to market intelligence firm Newzoo, having made $8bn in revenue in the first half of 2017 alone.
The investment in Huya granted it an option to increase its stake to 50.1% in the period between two and three years after the deal closes.