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Home / Business / Douyu, China's Twitch, backed by Tencent, is seeking a $ 500 million US IPO TechCrunch

Douyu, China's Twitch, backed by Tencent, is seeking a $ 500 million US IPO TechCrunch



Douyu, a Chinese live streaming service focused on video games, has filed a petition with the US Securities and Exchange Commission, which is preparing to invest up to $ 500 million to collect on the NYSE.

Wuhan-based Douyu, whose name is translated as "fighting fish," is the second service of Twitch which is supported by Tencent and goes public in the United States. Its direct competitor Huya, who has a name as fierce as Tiger's Teeth and rates Tencent as a big investor, raised $ 1

80 million on the NYSE listing in May of last year.

It's not surprising that Tencent secures its bets in the streaming of Esports. Because the giant relies heavily on video games to earn money. For example, Tencent may use the ad space of some of its portfolio companies to learn about the new releases. Douyu's file shows that Tencent's advertising fees last year had been a respectable 27.48 million yuan ($ 4.09 million).

Since Douyu warns in his prospectus, his alliance with Tencent may be very poor.

or the attention of other companies in which it is interested, including our direct or indirect competitors. As a result, we may not fully realize the benefits we expect from our strategic partnership with Tencent. Failure to realize the intended benefits of strategic collaboration with Tencent or the potential limitations of our collaboration with other parties could have a significant impact on our business and our operating results. "

However, there are nuances in the giants' attachment to China's top two live streaming services that could mean a greater affinity between Tencent and Douyu. The social media and gaming giant is currently the largest shareholder of Douyu with a 40.1 percent stake held by its wholly owned subsidiary Nectarine. In Huya, Tencent is the second largest stakeholder behind YY, the pioneer in China's live streaming sector, which emerged from Huya.

When it comes to financial conditions, the rival couple is in a direct race. In 2018, Douyu doubled its net revenue to $ 531.5 million. Huya had an advantage, contributing $ 678.3 million over the same period, doubling the amount a year ago.

Huya may have learned a few things about monetizing live streaming from 14-year-old YY, as it could assert more revenue despite a smaller user base. While Douyu demanded 153.5 million monthly active users in the fourth quarter, Huya had 116.6 million.

As the two earn money, they also diverge slightly. In the fourth quarter, 86 percent of Douyu's revenue came from virtual items that made users their preferred streaming hosts, while the remainder came from advertising and more. In contrast, Huya relied almost exclusively on live streaming gifts, which accounted for 95.3 percent of total revenue.

  douyu

Screenshot of a Douyu live streaming session

As Douyu identifies its coffers for both content and money Technologies After the upcoming IPO, competition in China's live streaming landscape will heat up , Earlier this month, Huya raised $ 327 million for a secondary offering to invest in content and R & D. Like many other content-based companies, Huya and Douyu rely heavily on quality creators to keep users loyal. Both have offered substantial checks to live streaming hosts, promising to make celebrities on the Internet bigger stars.

And they have broadened the battlefield outside of China as emerging media forms, for example, through short video services such as Douyin (China of TikTok ) version) and Kuaishou threaten to steal the eyeball of humans. Both bite-sized video apps now have a much larger user base than their live streaming counterparts.

"We intend to further expand overseas markets to expand our user base through both organic expansion and selective investment," said Douyu in his IPO

. Similarly, Huya's expansion overseas is also in full swing. "In addition to our strong domestic growth, we have successfully leveraged our unique business model to enter new markets overseas. We believe we will deliver long-term value through strategic overseas investment in 2019 and beyond, "said Huong's Chief Executive Rongjie Dong, in the company's Q4 earnings report.


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