China’s Video App Kuaishou Targets a $25 Billion Valuation – The Information
What happened: Video app Douyin’s domestic rival Kuaishou is said to be in talks with interested parties for undisclosed financing at a $25 billion valuation, a figure 38.9% higher than the $18 billion seen in previous funding round in January. The current proposed valuation is still much lower than $75 billion, the valuation Douyin’ parent company ByteDance had when acquiring a fresh $3 billion investment in August. Kuaishou declined to comment on the issue.
Why it’s important: Frequent financing requests regarding sizeable funding in the live-streaming and short video industry hint at commercialization and profitability problems. With Beijing tightening content regulation, user generate content (UGC) platforms such as Kuaishou and Douyin may see challenges in driving traffic with new content creation. Meanwhile, fierce competition will force players to grab market share and channel partners first, at the costs of heavy investment.