Shanghai-based news and video aggregation app Qutoutiao, which leverages artificial intelligence (AI) and is backed by Tencent, filed for an initial public offering (IPO) of up to $300 million in the US.
In its filing with the US Securities and Exchange Commission, the company said it has 48.8 million monthly active users and around 17.1 million daily ones, while the average time spent in the app is 55.6 minutes.
It also said its net revenue increased from CNY58.0 million ($8.5 million) in 2016 to CNY517.1 million in 2017. However, its net loss hit $77.7 million for the first six months of 2018, compared with $4.3 million in H1 2017.
As explained in the filing, the app aggregates articles and short videos from media and freelancers to create customised feeds for users.
“These feeds are optimised in real time based on each user’s profile, behaviour and social relationships through our proprietary AI-powered content recommendation engine,” the company stated.
It added it strategically targets users “from tier-3 and below cities in China because of the enormous opportunities in this underserved market” and that it “represents a new generation of technology-driven content platforms”.
The app competes with Jinri Toutiao (owned by ByteDance, which is also reportedly planning an IPO that could value it at around $45 billion) and Kuaibao, another app backed by Tencent.
Its plans for the funds raised via its IPO include expanding its user base, investing in technology, pursuing acquisitions and investment opportunities as well as promoting user generated content.
Following Tencent’s investment in the app in March, the company wants to “cooperate with Tencent more closely in various areas which we believe will provide strategic benefits to us, leading to improved growth prospects”.Subscribe to our daily newsletter