Chinese streaming video company iQiyi, backed by Beijing-based search giant Baidu Inc., has filed for an initial public offering in the U.S.
The fast-growing video firm, known for its Netflix-like mix of licensed and original programming, filed with the Securities and Exchange Commission for an offering of $1.5 billion, a sum that is expected to be revised upwards significantly as the IPO approaches. Last year, sources close to the company told Bloomberg that iQiyi is aiming for a market valuation of as much as $10 billion.
iQiyi has over 50 million subscribers and more than 420 million average monthly mobile users, according to the filing. The company posted a net loss of $574 million on total revenue of $2.7 billion last year.
iQiyi has spent heavily in a battle for market share against Tecent Video and Alibaba-backed Youku Tudou. The company has posted a loss every year since its inception in 2008. iQiyi said in the filing that it plans to use half of the net proceeds from the offering to invest in content offerings.
In an interview with The Hollywood Reporter last fall, iQiyi CEO Tim Gong Yu said that 40 percent of the company’s revenue comes from advertising; 33 percent from subscribers; and that gaming, e-commerce and other offerings constitute the remainder.
Baidu currently holds 70 percent of iQiyi’s shares. The search company will continue to be iQiyi’s controlling shareholder after the offering.
iQiyi plans to list its American Depository Shares on the Nasdaq under the ticker “IQ.” Goldman Sachs, Credit Suisse and Bank of America are leading the IPO.