Chinese online short video start-up Kuaishou Technology, supported by Tencent Holdings, is seeking to secure around $5 billion in a Hong Kong initial public offering, people with information about the listing disclosed.
The nine-year-old group is looking at lifting its market cap to more than $50 billion, sources who asked not to be named due to confidentiality conditions, told Reuters.
Kuaishou ("fast hand") is teaming up with financial experts with regards to the share sale estimated to take effect as early as 2021, sources bared. Details of the IPO including timeframe and size could still be revised as discussions are still at an early phase, the sources added.
The Beijing-based app company Kuaishou is in the 8th spot of the Hurun Global unicorn benchmark with a valuation of around $28 billion as of its latest series of funding.
The TikTok competitor has secured more than $4.4 billion in more than eight rounds of funding, the latest of which was in January this year, data compiler Crunchbase said. Based on Chinese media reports, Tencent poured in $2 billion for the startup in 2019 when it secured $3 billion at a valuation of nearly $30 billion.
The tech firm, which runs its titular platform in China and the Zynn and Kwai apps in international markets, is also backed by prominent investment groups that include the Jack Ma-backed private equity firm Yunfeng Capital, Sequoia Capital, and the Singaporean sovereign fund Temasek Holdings.
Kuaishou's plans come as top competitor ByteDance - which controls Douyin in China and TikTok overseas - has emerged as a target of U.S. regulatory scrutiny over data security.
The startup has tapped the services of China Renaissance, Morgan Stanley, and Bank of America to process its public bid and is considering to file for the float around end of nextd month, sources said.
According to Harvey Li, equity capital markets deputy chief at Citic CLSA, with the current China-U.S. frictions, "a lot of Chinese issuers are leaning more towards Hong Kong to list," the South China Morning Post quoted him as saying.
Founded in 2011, Kuaishou Technology produces a huge chunk of its sales from receiving a cut from tips that users give to their favorite live-streaming performers.
But the group has also expanded into ads and e-commerce and signed an agreement with China's second-biggest online retail firm JD.com Inc. to sell products via an in-app shop from which Kuaishou said it has generated over 100 million active customers per day.
