Kuaishou, a Chinese live-streaming app backed by Tencent, Baidu and Sequoia, is in talks to raise money at a valuation of as much as $25 billion, according to people familiar with the discussions. That would be up from $18 billion in an earlier fundraising round.
The fundraising is the latest shot in a multibillion-dollar arms race among Chinese video-streaming apps. Kuaishou, which features short videos of China’s working class and farmers broadcasting snippets of their own lives, is competing against apps like ByteDance Technology’s Douyin, also called TikTok. ByteDance, which also owns popular news app Toutiao, just raised $3 billion at a valuation of $75 billion from investors such as SoftBank. Kuaishou declined to comment.
A fundraising arms race among Chinese video streaming apps is heating up. Kuaishou, whose backers include Tencent and Baidu, is raising money at a valuation that could reach $25 billion, shortly after rival ByteDance raised money at a $75 billion valuation.
Kuaishou, which says it has 130 million daily active users, tapped an underserved segment of China’s online community by targeting people in smaller cities and the countryside rather than the urban elites in rich cities such as Beijing or Shanghai.
Kuaishou users film themselves doing everything from playing pranks to showing off cooking skills. While sometimes derided by critics in China as appealing to viewers’ lowest tastes, it’s also been lauded for offering a platform for people like migrant workers or those from rural parts of China who are usually not heard from in other mainstream apps, where online celebrities reign.
Fans tip their favorite performers by buying them virtual goods, like flowers or fancy cars.
Kuaishou makes money by taking a cut of these tips, which are facilitated by China’s highly developed digital wallets. But now Kuaishou is trying to find more ways to make money, including from advertising, online gaming and e-commerce. Earlier this year, Kuaishou launched a separate gaming app. Kuaishou’s internal goal for revenue from advertising next year is to reach tens of billions yuan, according to a person who was briefed on the plan.
While Kuaishou is among the most popular entertainment apps in China, there are some questions as it tries to fend off the explosive growth of rival ByteDance. Just two years after its TikTok was launched, it has reached 150 million daily active users in China, and 500 million globally, ByteDance says, threatening Kuaishou’s position in the live video-streaming market.