iQiyi Sports secures RMB 850 million in Series A

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iQiyi Sports, iQiyi’s online sports broadcasting platform, has completed its Series A financing round, raising RMB 350 million from China Sports Capital and Yao Capital, bringing total investment secured to RMB 850 million, local media is reporting (in Chinese).

iQiyi raised RMB 500 million in the initial tranche completed earlier in July. After completion of the round, the estimated valuation of iQiyi Sports reached RMB 3.35 billion.

iQiyi has been wanting to foray into China’s fast-growing sports entertainment market for some time. The company said it will continue to support the growth of its sports arm and it plans on investing more resources into its sports content, IP, and services.

iQiyi Sports, a joint venture between iQiyi and Super Sports Media, was formed in August. As part of the deal, Super Sports Media app changed its name to “iQiyi Sports”—a move to bring together broadcasting rights and expand sports coverage. Shortly after its formation, iQiyi Sports raised RMB 400 million from venture capital firm IDG Capital in exchange for a 13.33% stake.

“The combination of iQiyi’s advanced technological capabilities and vast numbers of subscribing members with Super Sports Media’s many years of experience in pay-per-view sports entertainment creates a partnership of unprecedented strength in the industry,” said Yu Lingxiao, CEO of iQiyi Sports.

Chinese sports industry has matured over the past few years, which, according to Xinhua News, is estimated to reach the scale of RMB 5 trillion by 2025.

The rising popularity of online streaming is changing the viewing habits of sports fans as well as the landscape of sports broadcasting services in China. Major sports streaming platforms have been aggressively obtaining all online streaming rights of high-profile international games. Tencent Sports, for example, signed a 5-year agreement with the NBA, which reportedly is worth $700 million. PPTV, a Sunning-owned video streaming site, also spent nearly $2 billion obtaining the broadcasting rights from international soccer competitions.