Series F funding in Kuaishou Technology led by Tencent win-win for both, says GlobalData

China-based short video social platform Beijing Kuaishou Technology Ltd (Kuaishou Technology) has recently secured US$3bn in Series F funding led by tech giant Tencent Holdings (Tencent). The move will be mutually beneficial for both the companies, according to GlobalData, a leading data and analytics company.

Of the US$3bn, Tencent invested US$2bn. Tencent, which has been a lead investor in Kuaishou Technology in several funding rounds in the past, will now hold 20% stake in the company. The latest funding round raised Kuaishou Technology’s valuation to more than US$28bn.

Kuaishou Technology platform allows users to share snippets of their everyday lives through short videos and live-streaming.

Aurojyoti Bose, Lead Analyst at GlobalData, says: “Investment in Kuaishou Technology is part of Tencent’s strategy to join the league of established players with short video apps. Tencent is looking to strengthen its position in the short video market and compete with ByteDance, which owns short video app TikTok and live streaming app Douyin.”

On the other hand, the funding will help Kuaishou Technology to fund its business growth. The company is expected to file for an IPO in the US in 2020 as it eyes global expansion.

Beijing-based Kuaishou has started testing the waters in overseas markets amid increased scrutiny of content posted on social media and online video platforms by Chinese authorities.

Bose concludes: “The cut-throat competition in China’s online video industry, which is dominated by ByteDance, and the slower growth of mobile Internet is encouraging app-developers to tap overseas markets. However, companies such as Kuaishou Technology that are looking forward to extend reach in global markets should also keep an eye on controversies and regulatory scrutiny of Tiktok and similar products in overseas.”

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