It may be No. 2 to the better-known Bytedance short video app goliath that owns both Douyin and TikTok. But the company whose Chinese name means “fast hand” is living up to its name by beating its much larger rival to market.
Kuaishou Technology disclosed its plan to make a Hong Kong IPO last Friday, becoming the latest Chinese tech firm hoping investors will focus on its rapidly growing revenue rather than its big losses. A source close to the company previously told Caixin the deal could raise up to $5 billion, which would value Kuaishou at $40 billion to $50 billion.
Kuaishou has posted explosive revenue and user growth over the last three years, capitalizing on the huge popularity of short videos. That trend grew stronger during the Covid-19 outbreak, as many people were forced to stay home in the first half of the year and turned to online entertainment as a result.
As it monetized its big user base of 260 million daily active users, the company’s revenue rose nearly five-fold from 8.3 billion yuan ($1.3 billion) in 2017 to 39.1 billion in 2019. It was on track to rise sharply again this year after reaching 25.3 billion yuan in the first half of this year. At the same time, its net loss ballooned to 68.1 billion yuan in the first half of this year from a 19.7 billion yuan loss for all of 2019.
One observer said investors have lately fixated on top line growth for Chinese tech firms, paying less attention to their big losses. But it remains to be seen if they’ll feel that way towards Kuaishou.
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Contact reporter Yang Ge (firstname.lastname@example.org)