Abu Dhabi, BlackRock To Buy IPO Shares in Kuaishou Technology - Bloomberg

Tencent-backed Chinese short-video start-up set to raise $6 billion in IPO

This just dropped on Bloomberg.

Abu Dhabi Investment Authority, BlackRock Inc, and other heavy hitters set to buy up to $2.5 billion of shares in Kuaishou Technology’s upcoming IPO.

Excerpt below:

“Kuaishou Technology, the Chinese short-video startup, has attracted BlackRock Inc. and the Abu Dhabi Investment Authority as cornerstone investors in its Hong Kong initial public offering, people with knowledge of the matter said.”

Capital Group Cos and Canada Pension Plan Investment Board also committed to buy stock in the offering, the people said, asking not to be identified because the information is private. Kuaishou is targeting to raise as much as $6 billion from the share sale, which is set to start taking orders as soon as Monday, the people said.

The company plans to set aside nearly $2.5 billion of IPO stock for about 10 cornerstone investors, the people said. Fidelity, Chinese buyout firm Boyu Capital and Morgan Stanley Investment Management also agreed to purchase shares, they said. Singapore state investment firms GIC Pte and Temasek Holdings Pte separately plan to participate in the offering, according to the people,” Bloomberg reports.

Last week, the South China Morning Post reported that the world’s second-largest video-sharing app received approval from Hong Kong authorities to raise between $5 billion to $6 billion.

Tencent Holdings, a perennial top ten pick in most major emerging markets indexes, owns a 21.6% stake in the company. “Its shares are expected to start trading before the Lunar New Year holiday, which starts on February 12, several people familiar with the matter have said,” the South China Morning Post (SCMP) reported.

Some Kuaishou Essentials

818 Million - The # of short video users by end June 2020 (SCMP)

$30 Billion - Valuation at most recent funding round

Meanwhile, The Wall Street Journal reports:

“The coming initial public offering of Tencent-backed Kuaishou—“fast hand” in Chinese—in Hong Kong could be one of the city’s biggest. Founded in 2011 as an app for making GIFs—animated images used in chats—the company is now the second-largest short-video app in China, behind Douyin, the Chinese version of TikTok. Analysts at Morgan Stanley, one of the IPO sponsors, value it between $70 billion and $97 billion. 

While Douyin [the China-only sister company of TikTok) was first known for goofy videos with music and dance that drew young people in, Kuaishou began as an app that documented daily lives of ordinary people outside of big cities. These days, more and more users are on both apps, but Kuaishou’s users are still more concentrated in smaller cities.