Photographer: Qilai Shen / Bloomberg
Photographer: Qilai Shen / Bloomberg
Technology Kuaishou, the main rival of ByteDance Ltd. in China, is trying to raise up to $ 5.4 billion in Hong Kong in what would be the largest IPO in the world since Uber Technologies Inc.
The short initialization of the video, supported by Tencent Holdings Ltd. is selling 365 million shares for HK $ 105 to HK $ 115 each, according to the terms of the deal obtained by Bloomberg News. The company will begin receiving orders from investors from Monday to January 29 and is expected to be listed on February 5.
Kuaishou is attempting the world’s largest Internet IPO since the sale of Uber shares in the U.S. for $ 8.1 billion in May 2019, according to data compiled by Bloomberg. The IPO of the Chinese startup will also give another boost to the already heated capital market in Hong Kong and could become the largest in Asia since Budweiser Brewing Co. APAC Ltd.’s $ 5.8 billion fluctuation nearly two years ago.
Kuaishou, which means “quick hand” in Chinese, is one of the biggest Internet success stories in China in the past decade, part of a generation of startups that prospered with the support of Tencent. Together with parent TikTok, ByteDance, the outfit co-created by Su Hua in 2013 was a pioneer in live streaming and the small size video format that has since been adopted worldwide by companies like Facebook Inc. , last valued at $ 180 billion.
Kuaishou’s offer attracted 10 key investors, who agreed to subscribe $ 2.45 billion in shares, based on the midpoint of the range traded. The lineup includes The Capital Group, Temasek Holdings Pte, GIC Pte, BlackRock Inc. and Abu Dhabi Investment Authority, show the terms, confirming an earlier Bloomberg news report. Key investors agreed to hold shares for six months in exchange for a guaranteed early allocation.
Kuaishou’s valuation may more than double after its Hong Kong IPO. A high-end price will value the Chinese company at $ 60.9 billion, up from the $ 28.6 billion it reached in a financing round last year, according to Pitchbook. Even at the lower end of the range, Kuaishou will still be valued at $ 55.6 billion.
ByteDance has long been a purported IPO candidate, but last year it fumbled in the fight against the TikTok ban in the United States after the video service was labeled threat to national security. The social media giant was in discussions to raise $ 2 billion before listing some of its Hong Kong businesses, Bloomberg News reported in November.
Kuaishou had an average of 262 million daily active users in September, according to its prospectus. That is still less than half of the 600 million in Douyin, the Chinese version of TikTok. That said, Kuaishou’s revenues rose 49% to 40.7 billion yuan ($ 6.3 billion) in the first nine months of last year, after it increased monetization efforts through advertising and e-commerce. While offering free access to its main platform, the startup takes some of the tips that users give to their favorite live-streamers who perform viral challenges, synchronize their lips with the latest pop songs and play video games.
Tencent owns about 21.6% of Kuaishou’s shares, and other sponsors include venture capital firms DCM, DST Global and Sequoia Capital China, the prospectus shows. Tencent’s shares rose by as much as 6.4%, to an all-time high early on Monday in Hong Kong.
Morgan Stanley, Bank of America Corp. and China Renaissance Holdings Ltd. are joint sponsors of the business.
– With the help of Dominic Lau and Zheping Huang
(Adds Kuaishou’s assessment in the sixth paragraph.)