iQiyi (爱奇艺), the Chinese entertainment company famous for its video streaming service filed for an initial public offering in the US, our sister media TechNode China is reporting.
The news comes after rumors and speculation of iQiyi’s IPO since the end of last year.
Read more: Five most highly-anticipated Chinese tech IPOs for 2018
The Beijing-based company filed with an offering size of $1.5 billion. iQiyi is aiming for a public market valuation of as much as $10 billion, people familiar with the matter said. Just like how IFR reported in October 2017, iQiyi chose three banks—Goldman Sachs, Credit Suisse Group and Bank of America—to lead the IPO.
Here are iQiyi’s user numbers and revenue numbers from the filing.
- For the three months ended December 31, 2017, iQiyi had about 421.3 million monthly active users and about 126 million active daily mobile users.
- iQiyi’s total revenue in 2017 increased to approximately RMB 17.38 billion ($2.67 billion) and in 2017 subscription revenue was approximately RMB 6,536 billion ($1.046 billion). However, the company posted a net loss of US$574 million.
In the filing, iQiyi stated that “We have had a net loss since its inception and may continue to suffer losses in the future.”
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The company is hugely dependent on high-quality original content on its video streaming service. For example, iQiyi bought the exclusive rights to stream Korean drama Descendants of the Sun in China in 2016, which later brought more than 1 billion views to iQiyi. In April, it became the only Chinese service that licenses content from Netflix.
Baidu owns 70% of iQiyi’s shares and iQiyi has been seeking an independent listing. In the filing iQiyi also mentioned that it signed the main business cooperation agreement with Baidu on January 19, 2018 in the areas of artificial intelligence technologies, smart devices / DuerOS, cloud computing services, online advertising, internet traffic, data, and content.
iQiyi officially launched on April 22, 2010 with its video streaming service. On November 3, 2012, Baidu acquired the shares held by Providence Equity Partners LLC, the second-largest shareholder of the iQiyi, to become its single largest shareholder. The company plans to offer Class A shares to the public, while Baidu will hold all of the company’s Class B shares, the filing shows.