PE investors join $1.53b financing round for Baidu’s iQiyi

Investors in the note include Hillhouse Capital, Boyu Capital, Run Liang Tai Fund, IDG Capital, Everbright-IDG Industrial Fund and Sequoia Capital. Baidu invested $300 million as part of the issuance, a filing showed.

“iQiyi has been a great asset and an important part of the Baidu ecosystem. We look forward to supporting the growth of iQiyi and enhancing its capability through artificial intelligence,” Robin Li, Baidu’s chairman and CEO, said in a statement.

Launched in April 2010 and originally known as Qiyi, iQiyi provides free and subscription services to licensed and self-produced original movies and shows. As of December last year, it had 481 million monthly active users on its mobile app.

Providence Equity Partners was formerly a minority investor in the business, but it sold its stake to Baidu in November 2012. In May 2013, Baidu acquired the online video business of PPS and merged with iQiyi to create the largest online video platform at that time. In November 2014, Chinese smart phone maker Xiaomi and Shunwei Capital – a VC firm set up by Xiaomi’s founder Lei Jun – invested $300 million in iQiyi.

In February last year, Li proposed to take iQiyi private in a deal that valued the video streaming business at $2.8 billion. It was abandoned after some of Baidu’s institutional shareholders said that the asset was undervalued and they wished to hold on to the unit.

Baidu's revenue increased 35.3% year-on-year to reach RMB66.38 billion ($10 billion) in 2015, while net profit jumped to RMB33.66 billion in 2015 from RMB13.2 billion in 2014. Within that, iQiyi’s revenues rose 84.3% to RMB5.3 billion in 2015. However, it recorded an operating loss of RMB2.38 billion, up from RMB1.11 billion a year earlier.

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• Topics
• Greater China
• Expansion
• Media
• Technology
• PIPEs
• TMT
• China
• Boyu Capital
• Baidu
• Hillhouse Capital Management