Tencent invests $318m in recently-listed streaming site Bilibili
Tencent Holdings has agreed to invest $317.6 million in Bilibili, a VC-backed Chinese animation streaming platform that listed on NASDAQ in March.
The internet giant will acquire approximately 25.1 million class Z ordinary shares – equal in value to American Depository Shares (ADS) – for $12.67 apiece, according to a filing. This will give it a 12.3% stake in Bilbili. The stock jumped nearly 8% to close at $14.37 on October 3, the day the investment was announced. It fell back to $13.55 the following day.
Bilibili raised $483 million in its IPO, selling 42 million ADS at $11.50, the midpoint of the indicative range. Post-offering, CMC Capital Partners was the largest external shareholder with 10.8% stake in the company, followed by Loyal Valley Capital with 7.7%, IDG Capital with 6.5%, and Legend Capital with 5%.
Founded in 2009, Bilibili is a video-sharing platform that focuses on anime, comics, and games. It allows users to submit, watch, and comment on videos in real time, with comments flying across the screen, a major attraction for Generation Z – individuals born between 1990 and 2009 - who comprise most of the company’s over 72 million average monthly active users.
The company generates over 77% of its revenue from mobile games, which include Fate/Grand Order and Azur Lane, through in-game virtual gift sales. Live broadcasting, advertising, and sales of content-related products the company’s own e-commerce channel provide additional income.
Revenue came to RMB2.5 billion ($395 million) in 2017, up 372% year-on-year, while the net loss narrowed from RMB911.5 million to RMB183.8 million. For the three months ended June, revenue reached RMB1 billion – RMB791 million from mobile games, RMB118.6 million from live broadcasting, RMB95.9 million from advertising and RMB21.1 million from product sales. Bilbili’s net loss for the period was RMB70.3 million, up 39% year-on-year, due to an 88% increase in operating expenses.
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