ByteDance rival Kuaishou receives approval for $6.6b IPO in Hong Kong

HONG KONG • Kuaishou Technology, the main rival to ByteDance, has received approval from the Hong Kong Stock Exchange for an initial public offering of about US$5 billion (S$6.6 billion), according to sources familiar with the matter, paving the way for one of the city's biggest listings of the year.

The Tencent Holdings-backed short-video start-up plans to begin gauging demand for its IPO as soon as next week, one of the sources said, asking not to be identified as the information is not public.

Kuaishou is angling for a valuation of US$50 billion, almost twice the recent estimate, Bloomberg News has reported.

A representative for Kuaishou had no immediate comment.

Kuaishou, which means "fast hand" in Chinese, is set to win the race against larger rival ByteDance in going public.

ByteDance, owner of wildly popular apps TikTok and Douyin, is in discussions to raise US$2 billion privately before listing some of its businesses in Hong Kong, Bloomberg News reported last year.

At US$5 billion, Kuaishou's IPO will be Hong Kong's biggest float since Anheuser-Busch InBev's Asian unit raised US$5.8 billion in 2019, excluding Alibaba Group Holding's secondary listing in the same year, data compiled by Bloomberg shows.

Kuaishou and ByteDance represent a generation of Chinese tech start-ups that have risen to the fore, thanks to a short-video surge, challenging the dominance of Tencent and Alibaba.

Kuaishou established its popularity among users in smaller cities and rural areas, with people streaming slices of everyday life, from harvesting corn to slurping noodles.

It has since expanded to audiences in bigger cities, with content ranging from people playing video games to teenagers lip-syncing pop songs, much like ByteDance's global app TikTok and its domestic Chinese version, Douyin.

Access to Kuaishou's main app is free, and the start-up takes a cut of the tips users give their favourite live-streaming performers.

The company was last valued by PitchBook at US$28.6 billion after a funding round last February. At US$50 billion, it would surpass SpaceX to become the world's third most valuable private company, according to CB Insights.

Tencent has about a 21.6 per cent stake in Kuaishou, and other backers include venture capital firms DCM, DST Global and Sequoia Capital China, according to a preliminary prospectus.

Morgan Stanley, Bank of America and China Renaissance Holdings are joint sponsors of Kuaishou's proposed IPO.

BLOOMBERG

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A version of this article appeared in the print edition of The Straits Times on January 16, 2021, with the headline ByteDance rival Kuaishou receives approval for $6.6b IPO in Hong Kong. Subscribe