Tencent said to invest US$2 billion in short-video app Kuaishou as competition heats up with ByteDance
- Kuaishou reached more than 200 million daily active users as of June, doubling the number from a year ago, the company said in July
Tencent Holdings, China’s biggest gaming and social media company, is reported to be in the final stages of a new round of investment into short-video app Kuaishou as competition heats up with ByteDance, operator of popular video platforms Douyin and TikTok.
Shenzhen-based Tencent is set to finalise a new US$2 billion investment in Kuaishou, which would boost the start-up’s valuation to US$28 billion, according to a report by The Information on Tuesday, citing people familiar with the matter. The Beijing-based video platform recorded a strong financial performance in the first three quarters, posting nearly 2 billion yuan (US$284 million) in net profit on revenues of 27 billion yuan, the report said.
The investment from Tencent, a long time backer of Kuaishou, would be part of a new US$3 billion round of funding that the start-up is expected to close by the end of December, which includes injections from Chinese private equity firm Boyu Capital and Singaporean sovereign-wealth fund GIC, according to the report.
With the latest funding, Tencent is betting that Kuaishou can outcompete rival ByteDance which is increasingly challenging Tencent’s social media platforms in terms of user attention time, while Tencent’s own short-video products are still struggling to stand out.
ByteDance overtook search engine giant Baidu and Tencent to become China’s second-largest earner of digital advertising revenues in the first half of 2019, only behind e-commerce giant Alibaba Group Holding, according to a report by consultancy R3 last month.
Tencent and Kuaishou did not immediately respond to requests for comment. ByteDance declined to comment.