ByteDance's chief rival wins HKEX nod for US$5b IPO

[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, according to people familiar with the matter, paving the way for one of the city's biggest listings of the year.

The Tencent Holdings-backed short video startup plans to begin gauging demand for its IPO as soon as next week, one of the people said, asking not to be identified as the information isn't 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. The owner of the 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 $5 billion, Kuaishou's IPO will be the city's biggest float since Anheuser-Busch InBev's Asian unit raised US$5.8 billion in 2019, excluding the secondary listing of Alibaba Group Holding in the same year, data compiled by Bloomberg show.

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

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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's since expanded to audiences in bigger cities, hosting 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 startup takes a cut of the tips users give their favorite live-streaming performers. The company was last valued by Pitchbook at US$28.6 billion after a February funding round. 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.

BLOOMBERG