Tencent-backed Chinese video-sharing app Kuaishou Technology filed an application for the Hong Kong initial public offering (IPO) on Thursday, November 5, 2020. The company’s filing comes as more Chinese firms are seeking to enlist elsewhere as tensions continue against China and the United States.
According to the South China Morning Post, Kuaishou Technology is the second-largest video sharing platform in the world next to ByteDance-owned company TikTok.
The company reportedly generates its revenue tips users give or share with their favorite performers. However, the download and use of the app is generally free.
The joint sponsors of the proposed IPO are the Bank of America Corp., China Renaissance Holdings Ltd., and Morgan Stanley. The initial public offering bid aims to raise funding for the video-sharing app.
However, Bloomberg states that the filing did not disclose a target amount. Despite this, a source states that the share could go for as high as $5 billion.
Upon raising its desired capital, the South China Morning Post revealed that the Beijing-based firm intends to allocate its funding towards boosting its ecosystem. Moreover, the company also plans to enhance its research and development and technology department.
The app rose to fame because it showcased life among the farm folk, the type of life in rural areas, and China’s smaller cities, as well as showing different aspects of everyday life such as eating and slurping noodles to harvesting crops.
Later on, Bloomberg said that audiences of the app also joined the so-called virality trends, with users leveraging the app’s technology to showcase a masterful lip-syncing game and users playing video games.
Apart from its expansion towards a wider variety of uses, the Chinese app has also seen a massive increase in its monthly users. In its report, Bloomberg states that it garners approximately 776 monthly active users, with these users on the app around 85 minutes a day.
As of writing, the company is valued at $30 billion. South China Morning Post reports that Kuaishou Technology chose to apply for an IPO in Hong Kong given that the United States has doubled down on its censorship on China and respective firms and tech companies hailing from the country.
Technode also said that China’s entertainment sector is heavily regulated by the government. In its filing, the firm said it may “lose licenses we need to operate our business and suffer reputation harm” should it fail to comply with the laws in place.