Tencent Holdings Ltd.’s investment in Chinese video streaming service Kuaishou values the startup at about $3 billion, people with knowledge of the matter said.
Kuaishou, whose platform is popular with rural communities and migrant workers, has raised $350 million in a funding round, the company said Thursday in an emailed statement. The investment comes ahead of a potential initial public offering of Baidu Inc.-backed Kuaishou, said the people, who asked not to identified because the information is private.
Tech giants from Tencent to Alibaba Group Holding Ltd. are investing billions of dollars in video content and services, hoping to convert time spent on these platforms into online ad revenue. Kuaishou, which translates into “fast hand,” is a video platform in the same vein as Instagram or Periscope.
Kuaishou has over 50 million daily active users who watch short clips and live broadcasts of everything from noodle-slurping to physical feats of prowess, with more than 5 million such videos uploaded a day. Unlike rival services run by YY Inc. or Momo Inc., most of its viewers and uploaders live in the countryside or smaller communities.
It gained an early reputation as the “Jackass” of China, thanks to the videos of people performing stunts and physical antics once prevalent on the platform. But the majority of clips today capture daily life in farming communities and the factory parks of lower-income Chinese cities, thanks in part to the censors who remove sensitive content.
A representative for Kuaishou declined to comment on the valuation, while a spokeswoman for Tencent didn’t immediately respond to requests for comment.
A browse through Kuaishou’s feeds reveals videos of migrant workers blowing off steam in karaoke parlors and young teens practicing dance routines. Homeless residents are filmed eating donated food and there’re countless clips of babies and animals. The company is now expanding abroad, hoping its expertise in targeting rural communities will help it gain traction in developing markets like Indonesia and Thailand.
“It’s a dynamic Chinese mobile Internet product that resonates with people,” Tencent Chairman Ma Huateng said in the statement.
Shares of Tencent closed 1 percent lower at HK$223 in Hong Kong.