Streamer IQiyi’s Sports Platform Raises $125 Million in First Month

A joint venture between video streaming platform iQiyi Inc. and a sports broadcaster has secured a total of 850 million yuan ($124.3 million) in funding in the month following its establishment.

IQiyi said in statement on Wednesday that Beijing Xin’ai Sport Media Technology Co. Ltd. has received a second tranche of financing worth 350 million yuan from two investors — Yao Capital and China Sports Capital, the latter a joint venture between venture capital firms CMC Capital Partners and Sequoia Capital. 

The funding followed an initial tranche of 500 million yuan completed last month. The two tranches will give the company a valuation of about 3.4 billion yuan, according to Beijing Xin’ai CEO Yu Lingxiao.

Beijing Xin’ai was formed in late July by iQiyi — which is backed by search engine Baidu Inc. — and Super Sports Media, a broadcaster known for livestreaming popular sports events such as the English Premier League.

Beijing Xin’ai operates a branded platform formed out of the integration of the two companies’ sports-related businesses — iQiyi Sports.

“Our partnership with Super Sports Media in this exciting new joint venture is the ideal combination of both companies’ strengths, stimulating growth across the industry,” said iQiyi founder and CEO Gong Yu.

“IQiyi is committed to supporting the growth of iQiyi Sports and will continue to contribute our wealth of existing IP (intellectual property) and resources to ensure our users receive a level of sports entertainment experience unmatched by any other platform,” he added.

IQiyi, which went public in the U.S. earlier this year, is one of China’s major online video platforms with 67.1 million subscribers, which it said included 66.2 million paid members by the end of June.

The deal comes at a time when the country’s major online entertainment platforms are scrambling to ramp up investment in sports to meet the increasing appetite for sports among Chinese internet users.

By partnering with Super Sports Media, a subsidiary of entertainment company Wuhan DDMC Culture Co. Ltd., iQiyi has accessed the latter’s rights to air some of most popular international sports events — such as the Australian Open, the UEFA Nations League and the ATP Tour — to its users.

Likewise, Suning Commerce Group, a retail conglomerate that owns online video platform PPTV, has also expanded rapidly to secure rights to air domestic and international soccer matches. Social media giant Tencent Holdings Ltd., whose Tencent Video is iQiyi’s largest rival, is now the exclusive online broadcaster of NBA League Pass in China.

Alibaba Group Holding Ltd. is another major player in the area, with its Youku Tudou securing the rights to air the top flight of Chinese soccer earlier this year, after making a deal with Suning.

Contact reporter Mo Yelin (yelinmo@caixin.com)