TikTok Rival Kuaishou Seeking to Raise $5.4 Billion in IPO

By Adriaan Brits Monday, January 25, 2021

Two Asian women watching a video on a smartphone.

Kuaishou Technology, the company behind the Chinese video-sharing mobile app Kuaishou, is reportedly looking to raise $5.4 billion in its upcoming initial IPO (initial public offering). The company aims to use the funds from the IPO to boost growth, make selected acquisitions, and for general corporate purposes.

Higher Valuation Possible

The business is offering 365 million shares priced between HK$105 ($13.55) and HK$115 ($14.84) a share, which could help the company secure up to $5.4 billion if another greenshoe option is not exercised.

On the other hand, if the company does opt for selling the greenshoe, the value of the offering would jump to as much as $6.2 billion. In that case, it would become the largest flotation since Alibaba’s secondary $13 billion listing in 2019.

The company’s IPO price range increased over the weekend, driven by a robust demand from institutional investors. Kuaishou will begin offering shares of stock until January 29, and the stock will become available for trading on February 5.

The tech startup, backed by the Chinese tech giant Tencent Holdings, would reach a market cap of as much as $61.7 billion after the IPO, including the greenshoe. If so, the business would become more valuable than its competitors Bilibili and online video platform iQiyi.

If the IPO delivers, it will lay the foundation for future offers in Hong Kong for Kuaishou. Its rival Bilibili is looking to initiate a secondary offering in the first quarter of 2021, as Startup Savant reported earlier this month.

The tech business is backed by ten major investors, the biggest of them being BlackRock, Temasek Holdings, and Gic, as well as Capital Group, Invesco, Fidelity International, Canadian Pension Plan Investment Board, Boyu Capital, Morgan Stanley Investment Management, and Abu Dhabi Investment Authority.

These cornerstone investors are expected to purchase around $2.45 billion of Kuaishou’s shares, which translates to more than 45% of the base offering. As much as 97.5% of the offering would be covered by the international investors, while 2.5% will be set aside for Hong Kong-based retail investors.

The company registered 262.4 million daily average users in the first nine months of last year, 59% more than during the same period in 2019, according to the startup’s prospectus. During that nine month period in 2020, the business saw its revenue climb by 49% to ¥40.7 billion ($6.3 billion).

Summary

Kuaishou Technology aims to secure up to $5.4 billion in its upcoming initial public offering, which would make it the largest IPO for a company in Hong Kong in over a year.

About the Author


Headshot for author Adriaan Brits

As an analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in Advanced Analytics & Media

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