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Chinese Animation Streaming Platform Bilibili Heads for U.S. IPO

Bilibili, China’s leading video streaming platform specializing in animation, is headed for a North American share sale. The company aims to raise some $400 million in fresh capital.

The disclosure comes only days after iQIYI, one of China’s leading video streamers, revealed details of its IPO on the NASDAQ exchange.

In its filing with the U.S. Securities & Exchange Commission, Bilibili did not reveal the pricing or timing of its share sale. It showed Morgan Stanley, BofA Merrill Lynch and J.P. Morgan as book-runners on the sale.

Like iQIYI, Bilibili is currently loss-making but growing fast. The company had revenues of $379 million (RMB2.47 billion) in 2017 and recorded losses of $28.2 million (RMB184 million). It reported monthly active users of 72 million in the fourth quarter of last year, and an audience strongly skewed to young adults. Some 82% are born between 1990 and 2000.

Vast spending on content and scrambles for market share have kept China’s mainstream video platforms in the red until now. Bilibili may sense an opportunity to make a great leap forward. Its closest rival, AcFun, owned by Alibaba’s Youku as well as financier SB China Capital, was recently closed down.

A risk factor was revealed in July last year when both Bilibili and AcFun were abruptly forced to remove large amounts of their foreign content. That appeared to be the result of a government crackdown on material that it deemed sensitive ahead of last year’s big domestic political events, and as part of the constantly changing regulatory attitudes towards Japanese, Korean and American content.

Chen Rui, Bilibili’s founder and chairman, currently owns 21.5% of the company. Other existing investors include private equity firm CMC Capital with 12.8%, IDG-Accel China Funds with 7.6%, funds belonging to Legend Capital with 5.9%, and Tencent 5.2%.

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