Short video app Kuaishou, also known as Kwai outside of China, is planning an initial public offering (IPO) in the US in 2020, in a bid to raise fresh capital and compete with its competitor ByteDance, Bloomberg reported today, citing multiple sources.
In the pre-IPO round, the eight-year-old firm is collecting over USD 1 billion with a targeted valuation at USD 25 billion, one person familiar with the matter said. The funds are coming mostly from early investor Tencent, according to the report.
Kuaishou is a core part of Tencent’s strategy to face against the current world’s most valuable startup ByteDance and its short video app TikTok. Kuaishou is updating its platform to integrate more mini videos, but it still lags behind ByteDance’s offer.
The IPO plan also comes along with the news that Kuaishou’s daily active users (DAUs) in Brazil have climbed up to three million, and the app has also topped the Brazilian Google Play free download charts for a couple of days, Chinese media Jiemian reported.
Kuaishou has already started an extensive recruitment campaign for its overseas expansion plans, Jiemian’s report added, citing people close to the firm.
The moves are a signal of Kuaishou’s intentions to revive its business in the overseas market, with Brazil apparently representing a key market, as it has a more mature business ecosystem which may bring higher advertising value to the company.
Back in 2017, Kuaishou started to look overseas for its further growth. It once gained huge popularity in countries including South Korea, Turkey, and Russia last year. However, after the first wave of downloads, user retention and DAUs remained sluggish, due to the lack of sustainable growth model and a limited budget, 36Kr earlier reported.
A leadership shakeup in its global team that happened at the end of 2018 made things worse. Liu Xinhua, then head of Kuaishou’s globalization division, resigned, along with many employees that reportedly got laid off.
Currently, the firm still holds hope for the international market, pivoting to South America this time. In addition to the international expansion plans, Kuaishou is also exploring to diversify its business. The company added film production and distribution to its business scope on Wednesday, according to Chinese business information provider Tianyancha.
As a response to Kuaishou’s fast growth in Latin America, ambitious TikTok has raised the strategical importance of Brazil in its globalization plan, KrASIA reported earlier this week.
36Kr is KrASIA’s parent company