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Chinese video streaming site iQiyi files for $1.5B US IPO
Video streaming site iQiyi Inc. is set to be the latest Chinese company to go public in the United States.
The company filed paperwork for an initial public offering with the Securities and Exchange Commission Tuesday. The IPO will offer American Depository Shares on the Nasdaq under the symbol “IQ,” with a goal of raising $1.5 billion. The first IPO filing is usually a placeholder, however, meaning that the final amount of the IPO may well come in higher.
The company, 80.5 percent-owned by Chinese internet search giant Baidu Inc., was founded in 2010. It offers a Netflix-like service that includes monthly subscriptions along with ad-supported free videos. IQiyi said in the filing that it currently has more than 50 million subscribers and more than 420 million average monthly mobile users, though it’s not yet profitable, reporting a net loss of $574 million on total revenue of $2.7 billion in 2017.
Coming into its IPO, iQiyi had raised $1.9 billion to date, with its latest round of $1.53 billion in 2017 including a further $300 million investment from Baidu. The decision to go public is said to be thanks to fierce competition for market share in China, where iQiyi is currently neck-and-neck with Alibaba Group Holdings Ltd.’s video streaming service Youku Tudou Inc.
The U.S. has long been a favored destination for Chinese companies seeking to raise large sums in IPOs. The most recent listing was from search engine provider Sogou Inc. in November, with a $540 million float.
iQiyi’s filing adds to momentum in IPOs this year, with a growing number of companies filing to go public. Dropbox Inc. announced Feb. 23 that it aims to raise at least $500 million in a public offering that could occur as early as March 13. Netgear Inc. said Feb. 6 that it would be spinning off its internet-connected camera business Arlo Technologies Inc. in a Nasdaq float in the second half of the year. SurveyMonkey Inc. was reported in talks for an IPO Jan. 17, and both Lyft Inc. and Chinese mobile device maker Xiaomi Inc. are believed to be looking at going public later this year as well.
Image: iQiyi/screenshot
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