Tencent-backed Douyu files for $500m IPO in New York

Yet another Chinese firm plans to go public overseas.

Photo by Sean Do on Unsplash

Douyu, a live-streaming platform backed by Tencent, quietly filed with the U.S. Securities and Exchange Commission for a planned US$500 million initial public offering in the second quarter of 2019. If successfully listed, Douyu will be the second Chinese game-streaming platform to go public in the United States, after Huya.

Last year, Douyu was said to be eyeing a public listing in Hong Kong, but the company switched gears and decided to head to New York instead. Its goal of raising US$500 million is more conservative than its previous target of US$600 to US$700 million.

Six-year-old Douyu was founded as an anime streaming platform and was later acquired by Kuaishou,  a photo-sharing and short video app backed by Tencent. In 2014, it became an independent entity – a live-streaming platform that offers a wide variety of online video content ranging from technology, sports, music, movie, outdoor, TV Programs to gaming. Some examples of the more popular games where users live-stream their matches include PlayerUnknown’s Battleground and Arena of Valor. 

China’s live streaming industry has been forecasted to grow from US$5.5 billion in 2017 to US$16.5 billion by 2022, according to data from Statista. 

A 2018 Tencent report predicted that China’s esports industry is set to reach 350 million users by 2020 and generate USD $1.5 billion in revenues.

At the end of 2018, the Chinese government thawed a nine-month freeze on issuing new video game licenses.

Like other Chinese media platforms, one of Douyu’s revenue streams comes from virtual gifting. Viewers buy imaginary gifts – flowers and other virtual items – for their favorite performers and Douyu takes a hefty cut. Advertisements on the platforms and online gaming account for a major portion for Douyu’s revenue. In 2017, the founder of Douyu Chen Shaojie told the SCMP that the firm’s revenue has jumped by more than 700 times between 2014 and 2017.

Editor: Ben Jiang and Brady Ng