Chinese video streaming platform Bilibili is on course for an IPO in New York that could raise at least $200 million, a source told Bloomberg. The eight-year-old site has become the nexus for young Chinese in love with the ACG culture of animation, comics, and games.

In 2016, the top searched keyword on Baidu among China’s post-00s generation is “Bilibili”, followed by “Taobao.” Less than 10% of Bilibili’s 100 million active users are above 25, Chairman Chen Rui revealed in a speech last December.

China’s ACG market, like the online video gaming with which it shares a large user overlap, is lucrative. In 2016, China had 270 million ACG users (in Chinese)—that’s one in five Chinese, according to iResearch estimates. In 2015, China’s ACG industry hit a market value of 100 billion RMB and growth is expected to continue, says Qianzhan Industry Institute. Brands from KFC, Nike to Maybelline have taken notice of the Bilibili’s attraction to young Chinese and rushed to set up their ACG adorned booths at Bilibili’s carnival-style conference earlier in July.

For all online video streaming platforms, content is the main driver for user acquisition. So far Bilibili has poured investments into over 30 companies in the ACG space, according to public data collected by IT Juzi. This would help Bilibili gain a footprint in every level of the ACG value chain, from literature, manga, anime, games, social networks to merchandising. User-generated content (UGC), however, plays a bigger role for Bilibili, driving 68% of the site traffic, says Chen. With one million active content creators, the site enjoys a high user stickiness allowing it to test out various monetization sources including live streaming and mobile gaming.

Baidu’s iQIYI, often known as the “Netflix of China”, is also reportedly filling for an IPO in the U.S., according to Bloomberg. No major video streaming sites in China have turned a profit yet.  When asked when Bilibili will start making profits, Chen told local media: “We will try to become profitable after iQIYI.”

Telling the uncommon China stories through tech. I can be reached at ritacyliao [at] gmail [dot] com.

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