Chinese live streaming company YY is planning to spin off its gaming streaming unit Huya for an independent IPO. The company has submitted a draft registration statement on a confidential basis to the US Securities and Exchange Committee for a possible listing in the US market.
The parent firm made the news public in its annual report without giving further details about the IPO timetable and size. An earlier Bloomberg report put the unit’s valuation at around $200 million.
“In the fourth quarter of 2017, driven by both YY Live and Huya, our mobile live streaming monthly active users increased by 36.6% year over year to 76.5 million, and our total live streaming paying users increased by 25.0% year over year to 6.5 million,” stated David Xueling Li, Chairman and acting Chief Executive Officer of YY.
Huya’s improving financial performance may add appeal to investors. Its total net revenue nearly doubled YoY from RMB 339 million ($53 million) to RMB 741 million in the fourth quarter of 2017.
China’s live streaming boom spans many verticals from online shopping to education, but gaming is where it first prospered and therefore one of the most crowded areas with several established dominators. In addition to Huya, another Chinese Twitch counterpart Douyu is rumored for an IPO in Hong Kong at $300 million to $400 million valuation (paywall).
A major driver for the quick rise of game streaming is the prospering e-sport industry. Valued at $3 billion in 2016, the e-sports market in China is expected to hit 220 million audiences at the end of 2017, says the CTI e-sports report.
After a lackluster 2017, several long-rumored Chinese IPO candidates are making their moves. Local media is brimmed with details about Xiaomi’s listing. Last week, both video streaming service iQiyi and anime streaming platform Bilibili filed for US IPO.