Tencent-backed Twitch-like Douyu reportedly files for $700m HK IPO

Douyu rival Huya listed on New York Stock Exchange in May. 

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Tencent-backed Twitch-like Douyu reportedly files for $700m HK IPO

Tencent-backed Douyu, China’s largest game-streaming platform by DAU, is planning a US$700 million HK IPO in Q3 this year, according to a report by South China Morning Post, becoming the second Chinese game-streaming company to go public, after Huya.

Originally a live streaming unit of anime-streaming platform AcFun, which was just acquired by Tencent-backed Kuaishou, Douyu became an independent brand in 2014. The platform allows users to watch players play games including the popular PlayerUnknown’s Battleground and League of Legends, which have amassed large player communities. Apart from game streaming, viewers can also watch a wide range of content, including entertainment, education, etc.

In March this year, Douyu’s DAU was 6.7 million, ahead of US-listed YY and Huya whose DAUs were respectively 5.8 million and 4.74 million, according to a report by data service Jiguang.

Image credit to Jiguang.

The company claims to have turned a profit since the beginning of 2017, according to the CEO of Douyu CHEN Shaojie. Its revenue increased by over 700 times during the past three years, as per consulting firm Deloitte.

Douyu is dependent on users tipping influencers, advertisement, e-commerce and games for revenue. One of its most prominent rivals, Huya, a spinoff of YY, has incurred a net profit of RMB 31.4 million (around US$ 4.9 million) in Q1 2018.

China is the world’s largest market for live streaming with 220 million live-streaming app users since February 2018, that’s 22 in every hundred, according to the abovementioned Jiguang report. According to consulting firm Frost & Sullivan, the Chinese market for live streaming in 2017 was worth RMB 25.7 billion (around US$4.1 billion) and is expected to hit RMB 97.8 billion (around. US$ 15.7 billion) by 2022.

In China, Douyu competes with rivals including US-listed YY and Huya, as well as Inke which filed to list in Hong Kong in March. Douyu counts Sequoia Capital and Tencent as backers. Previously in March, Douyu and rival Huya pocketed US$630 million and US$461.6 million from Tencent on the same day.

By investing in game-streaming apps, Tencent could potentially create synergies among its investees in game-streaming and its gaming unit, which is one of the key drivers of the company’s revenue growth.

 

Editor: Jason Zheng