Tencent joins $462m Series B for China’s Huya
Tencent Holdings has participated in a $461.6 million Series B funding round for Huya, a VC-backed Chinese game broadcasting subsidiary of US-listed social networking platform YY.
No additional investors or ownership details have been disclosed, although YY will retain control over Huya. As part of the transaction, Tencent will have an option to purchase additional shares in the company up to a 50.1% stake.
Huya raised a $75 million Series A last year led by China Ping An Insurance with participation from Banyan Capital, Engage Capital, and Morningside Venture Capital.
"This investment will reinforce and solidify Huya as the leader in the fast-growing game live streaming market in China,” David Xueling Li, chairman and acting CEO at YY, said in a statement. “Supported by Tencent's strong capabilities in game development, distribution and operation, Huya will march into a new era of building and maintaining the largest game live streaming and e-sports community for young generations in China.”
YY, which claims to China's leading live streaming social media player, began branding its gaming services as Huya in 2015. Huya is a social networking platform for video game enthusiasts, allowing users to broadcast recorded game sessions online and share feedback with each other. The service also supports virtual gift exchanges which generate a commission for the company.
YY was founded in 2005 and went public in 2012. Its other products include free-to-download group communication service YY Client as well as web portals under the brands YY.com, Duowan.com and Mobile YY. Li and the company’s then-chairman Lei Jun submitted a $3.7 billion buyout bid in 2015 but the offer was withdrawn in 2016 due to unfavorable market conditions.
YY recorded RMB8.2 billion ($1.2 billion) in revenue for the year ended December 2016, up from RMB5.9 billion the year before, while net profit rose from RMB1 billion to RMB1.5 billion. Huya’s revenue grew from RMB356 million to RMB797 million over the same period, with its net loss growing from RMB416 million to RMB476 million.
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