Chinese search engine giant Baidu may be seeking a U.S. share listing for its video streaming site iQIYI as early as 2018, Bloomberg reports.
iQIYI is China’s streaming market leader and operates a mixture of ad-supported and subscription services. It had 481 million monthly active users at the end of 2016, and is believed to have since increased its paying subscriber base to more than 60 million.
The Bloomberg report says that the company would seek a valuation between $8 billion to $10 billion from the IPO. That’s a small fraction of Netflix, which is currently rated at $80 billion, but it’s also a major step up from early last year when iQIYI’s founder, Gong Yu, and Baidu co-founder Robin Li tried to take the company private and buy the unit out from the NASDAQ-listed parent company. Their $2.8-billion offer was challenged by U.S. investors and quickly withdrawn.
Competition in China’s streaming sector is fierce. iQIYI competes with Alibaba’s Youku Tudou and Tencent Video, and losses have been heavy. Earlier this year, iQIYI raised $1.3 billion for ongoing content investment from backers including Hillhouse Capital, IDG and Sequoia Capital.
A JP Morgan research report in May estimated that iQIYI could be the first of the three leading Chinese streaming firms to break even, possibly by 2018. Ongoing losses or a short track record of profitability would preclude a listing in China, but not in North America.