Tencent invested in Chinese live broadcasting app maker Kuaishou ahead of a potential initial public offering, valuing the startup at about $3 billion, Bloomberg reported.
Kuaishou, a photo sharing and live-streaming app maker founded in 2011 and backed by Baidu, closed a $350 million funding round this week. The app, similar to Instagram and Twitter’s Periscope, is estimated to have more than 40 million daily, and 100 million monthly, active users.
Unlike services run by rivals YY and Momo, it is mostly popular in rural areas and small cities.
“It’s a dynamic Chinese mobile internet product that resonates with people,” Tencent chairman Ma Huateng said in the statement.
The app was the fourth largest in China in terms of traffic in 2016 and became famous “as users uploaded bizarre and sometimes gruesome videos, including one where an elderly woman ate a light bulb and pieces of broken glass,” it was earlier reported.
According to Bloomberg, the app now has censors and its content is mainly clips of life in farming communities and factory parks.
Tencent said recently it isn’t focused on making its video businesses profitable this year, rather it wants to keep people engaged with WeChat, its popular messaging service which has some 900 million monthly users.
Meanwhile, it reported a 47 per cent rise in net profit for the December 2016 quarter to CNY10.53 billion ($1.5 billion) from a year earlier as it warned of tough competition in its gaming and content businesses.
It also hired Zhang Tong, former head of Baidu’s big data lab, to leads its artificial intelligence unit.