Chinese online video firm iQIYI has raised $1.53 billion through the sale of convertible debt. The new finance will allow it to keep investing in content and services as the streaming sector develops.
The company is a majority owned subsidiary of Baidu, the group that dominates online search in China. Baidu revealed that it had put up $300 million into the refinancing, with other companies accounting for the balance. They include Hillhouse Capital, IDG Capital and Sequoia Capital, according to a statement.
iQIYI operates both advertising supported and subscription video models and at the end of 2016 claimed some 481 million monthly active users.
Growth and competition with Tencent Video and Alibaba’s Youku Tudou have come at a heavy price. The firms compete for new content and also produce their own original TV shows and movies.
Last year, Baidu received a $2.8 billion (tk) takeover proposal for iQIYI from the founders of the company and Robin Li, co-founder of Baidu. The deal was abandoned in July after some of Baidu’s institutional shareholders said that they wished to hold on to the unit — despite its losses.
Baidu, which has its shares traded in ADR form on NASDAQ, is scheduled to reveal its 2016 financial results later this week (Thursday evening, and Friday morning Beijing time.)