China’s tech giant Tencent is said to be in final talks to invest $2 billion in short video platform Kuaishou in the latter’s upcoming $3-billion pre-IPO round, according to a local media report.
The round is expected to see participation from Sequoia Capital, Temasek Holdings, Boyu Capital and Alibaba backed Yunfeng Capital, according to a media report.
The pre-IPO round would give Kuaishou a valuation of $28.6 billion, the report added.
Tencent, which has invested in Kuaishou’s previous rounds, is the majority shareholder in the video platform. Kuaishou raised $1 billion in its Series E round in 2018. Additionally, a few months later Tencent made a $400-million in the company.
Since 2012, Kuaishou has also raised funding from Baidu, Morning Venture Capital and China Media Capital.
Along with the financing round, Tencent also signed an exclusive agreement with Kuaishou in November to further cooperation in gaming.
Tencent is looking to strengthen its position in the short video niche market, a move that will allow it to compete with Bytedance’s Douyin. Tencent has devoted a lot of resources toward building a library of short and mini video offerings, the key to retaining user attention and boosting advertising revenue, but has yet to catch its rival, according to Bloomberg report.