iQiyi, the video-streaming unit of Chinese search engine giant Baidu, has filed for an initial public offering in the United States, seeking to raise around US$1.5 billion.
The company plans to list on the Nasdaq exchange under the symbol “IQ,” according to a filing Tuesday with the US Securities and Exchange Commission, Reuters reports.
The listing will give the firm extra financial muscle as it squares off against rival Youku Tudou, an entity now controlled by Alibaba Group, in China’s online entertainment market.
iQiyi, which offers free and subscription video content, raised US$1.53 billion in a funding round last year, including US$300 million from Baidu.
Baidu, which currently owns 80.5 percent of iQiyi, will continue to be its controlling shareholder after the IPO.
The entertainment unit is one of few services that Baidu hasn’t opted to fold or sell off as part of a wide-scale restructuring to focus on artificial intelligence and autonomous driving, Reuters noted.
iQiyi has posted losses since its inception in 2010. The Netflix-like video platform reported a net loss of 3.74 billion yuan (US$592 million) for 2017, after a 3.07 billion yuan loss in the previous year.
Revenue, however, rose to 17.38 billion yuan from 11.24 billion yuan.
The Beijing-based firm, which was founded in 2010, is said to have over 50 million subscribers and more than 420 million monthly active users on mobile devices.
The site has a mix of user-generated and original content, including several successful local web-series as well as licensing deals for foreign content, Reuters noted.
Last year the firm became the first Chinese site to ink a licensing deal with Netflix.
The firm, which has been valued by some analysts at US$17 billion, is promoting its ability to use artificial intelligence and user data to deliver videos that generate billions of views, the Wall Street Journal noted.
Two of its original series, “The Mystic Nine” and “Burning Ice,” have together garnered more than 13 billion views, iQiyi said in its filing.
“We distinguish ourselves in the online entertainment industry by our leading technology platform powered by advanced AI, big data analytics and other core proprietary technologies,” it said in its filing, according to the Journal.
“Our core proprietary technologies are critical to producing content that caters to user tastes, delivering superior entertainment experience to our users.”
China’s online video entertainment market is expected to grow to 688 billion yuan (US$109 billion) by 2022, up from about 51 billion yuan in 2012, iQiyi said, citing a report by iResearch.
iQiyi plans to use half of the net proceeds from the IPO to expand and enhance its content offerings.
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