Baidu-backed streaming-video service provider iQiyi plans US IPO

iQiyi, the Chinese entertainment company backed by Baidu, filed for an initial public offering in the US.

The Beijing-based company filed with an offering size of US$1.5 billion, an initial place holder amount that is likely to change, according to a filing with the US Securities and Exchange Commission. iQiyi is aiming for a public market valuation of as much as US$10 billion, people familiar with the matter said last year.

iQiyi, whose streaming-video service is similar to American rival Netflix, had 50.8 million subscribers at the end of 2017, according to the filing. The company posted a net loss of US$574 million on total revenue of US$2.7 billion last year.

IQiyi’s move towards public markets follows a blockbuster year for Chinese companies listing in the US. Twenty-one businesses went public on American exchanges in 2017 to raise a combined US$3.9 billion, according to data compiled by Bloomberg. That is the most since 2010, when 40 Chinese companies raised a total of US$4 billion.

The company plans to offer Class A shares to the public, while Baidu will hold all of the company’s Class B shares, the filing shows. Baidu currently holds 70 per cent of iQiyi’s shares.

Goldman Sachs, Credit Suisse Group and Bank of America are leading the IPO.