Tencent-backed China Literature acquires 20% stake in Thai startup OBU

A welcome screen for the QQ Reading application, operated by China Literature Ltd., a unit of Tencent Holdings Ltd., is displayed on an Apple Inc. iPad Mini in an arranged photograph taken in Hong Kong, China, on Wednesday, Oct. 25, 2017. Photographer: Anthony Kwan/Bloomberg

China Literature, the e-books business spun off by Tencent Holdings Ltd, has agreed to acquire a 20-per cent stake in Thai startup OBU for $10.5 million, according to a Hong Kong exchange filing.

Shanghai-based China Literature is one of the country’s largest online literature platform. It owns nine major branded products and its flagship is QQ Reading, a mobile aggregation and distribution platform. Tencent holds a controlling stake in the company.

OBU, on the other hand, is a Thailand-based startup that is principally engaged in the business of providing online literature and digital lifestyle content through various online platforms. Tencent also holds a 42-per cent stake in OBU.

Tencent launched OBU as a joint venture with Ookee, which was founded in Thailand as an e-books and magazines startup across southeast Asia with presence in Thailand, Vietnam, the Philippines, and Malaysia.

In its filing, China Literature said it has agreed to acquire, through its wholly-owned subsidiary Cloundary, the 20-per cent stake in OBU from Kapok Tree and Ookbee, which own 58 per cent and 42 per cent of OBU, respectively.

When the deal is completed, Ookbee will continue to be the majority shareholder with 51 per cent stake while Kapok Tree and Cloudary will hold 29 per cent and 20 per cent, respectively.

Additionally, Cloudary and Ookbee will establish a 60:40 joint venture company to better explore potential opportunities and penetrate the Thailand online literature market.

China Literature expects Thailand’s online literature market to grow at a fast pace, with increasing awareness about online literature and its market potential among Internet users, content creators, local publishers, and foreign content providers.

With approximately 57 million Internet users, Thailand has one of the highest Internet penetration among ASEAN countries, while its high-speed Internet cost is one of the lowest, according to data cited by China Literature.

Last year, China Literature agreed to buy New Classics Media (NMC) for 15.5 billion yuan ($2.3 billion). NCM is a renowned TV series, web series, and film producer in China.

Bloomberg reported in May that China Literature’s shares tumbled as China expands its crackdown on online content.

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

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  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.