Kuaishou Technology Plans an IPO

Laying the Groundwork for a Public Debut

Kuaishou Technology, a Beijing-based video sharing and live streaming platform, has filed for an IPO in Hong Kong. The company is a competitor to ByteDance, the Chinese parent company of TikTok. Tencent (TCEHY) is one of Kuaishou’s main shareholders, owning a 21.6% stake in the company. Sequoia Capital China and Baidu are also shareholders.

Kuaishou is hoping to raise about $5 billion through its IPO and earn a valuation of about $50 billion. Kuaishou has hired Morgan Stanley (MS), Bank of America (BAC), and China Renaissance Holdings as sponsors for its public offering.

Kuaishou’s Origin Story

Kuaishou, which translates to “fast hand” in Chinese, was founded in 2011 by former Google (GOOGL) and Hewlett Packard (HPQ) engineers. It began as a platform to create and share GIFs. Two years later in 2013, the company added short-form video capabilities. In 2016, it launched a live-streaming video service.

Kuaishou operates the world’s second-largest short-video platform measured by average daily active users, after Douyin, ByteDance’s domestic version of TikTok. Kuaishou generated about $7.2 billion in revenue in 2019. During the first half of 2020, its revenue surged 48% compared to the same period a year earlier.

Ant Group and ByteDance’s Challenges

Kuaishou is planning to go public at a time when many of its fellow Chinese tech companies have faced regulatory battles at home and around the world. Last week, Ant Group suddenly suspended its $34 billion dual listing in Shanghai and Hong Kong because of concerns from Chinese regulators.

Kuaishou’s rival ByteDance has been engaged in high-profile disputes with lawmakers in the US and other countries. Most of Kuaishou’s users and operations are in China, which will make it less vulnerable to international tensions than ByteDance. However, some bans of Chinese apps in India have impacted Kuaishou’s business, and tensions between the US and China could make it difficult for Kuaishou to expand into the US market. Despite these potential headwinds, the company is moving forward with preparations for its IPO, and could make its debut as early as January 2021.

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