Mar. 9 (NBD) -- Chinese gaming and social media giant Tencent is upping the ante in the video game livestreaming media with new investment plans.
Domestic online streaming platform Douyu has raised 4 billion yuan (630.4 million U.S. dollars) in a new round of financing, which was exclusively funded by Tencent, the platform's CEO Chen Shaojie said Thursday. This pushed Douyu's total funding to more than 6 billion yuan (945.6 million U.S. dollars), excluding the undisclosed fund raised in the Series D round.
According to previous reports, Tencent also participated in Douyu's Series B and C funding rounds.
On the same day, Huya, a lives broadcasting subsidiary of leading livestreaming social media platform YY Inc., announced via its WeChat account that it has received 460 million U.S. dollars from Tencent in its Series B funding round.
NBD tried to confirm this with Huya and Tencent, but both parties declined to comment.
Through the new investment, Tencent has gained a competitive advantage in the niche sector.
Currently, livestreaming platforms are scrambling to be the first to get listed.
According to the fiscal report released by YY Inc. Monday, Huya has secretly submitted the IPO application to the U.S. Securities and Exchange Commission, becoming the first of its kind to publicly announce the IPO plan.
The report shows the revenue from Huya reached 693 million yuan (109.2 million U.S. dollars) in the fourth quarter of 2017, accounting for 20.57 percent of YY Inc.'s total.
Meanwhile, livestreaming app Inke is reportedly planning to get listed in Hong Kong, aiming to raise 300 million U.S. dollars. However, Inke refused to comment when reached by NBD.
According to previous announcements, Inke obtained revenue of 1.035 billion yuan (163.1 million U.S. dollars) and net profits of 244 million yuan (38.5 million U.S. dollars) in the first quarter of 2017.
Famous cultural technology investor Cao Haitao said to NBD that the livestreaming industry is seeing intensified competition, and it is wise for players to get listed when they are in a good shape. In case of industry changes or fluctuation in business performance, their IPO plans may end up with nothing.
While seeking an IPO of shares, livestreaming companies are struggling to diversify their business.
For example, Douyu has been tapping into opportunities in the pan-entertainment area in recent years, while pan-entertainment platform Huajiao has announced a platform to invest 100 million yuan (15.8 million U.S. dollars) to make inroads into the game livestreaming sector.
Next, livestreaming companies will extend their reach into vertical areas such as technology, finance, culture, and education, according to a report on the ecosystem of China's livestreaming industry in 2017 released by Tencent's Penguin Intelligence.
An industry source acknowledged that content diversification is indeed a general trend for livestreaming platforms as single business mode and revenue structure will hinder their listing plans, but the gaming business will remain central to them.
In the eyes of Cao Haitao, only platforms that can deeply integrate the upstream and downstream of the industry chain and develop a healthy revenue structure and sustainable profitability can go further in the capital market.