Tencent Music seeks to raise $2 B in US IPO

Chinese music-streaming giant Tencent Music Entertainment Group is looking to launch its initial public offering in the US, through which it plans to raise $2 billion, according to a Reuters report. The IPO size is nearly half from the $3 billion-$4 billion that the company was believed to be earlier eyeing at a valuation of $25 billion, the news report said.

While Tencent officially declined any such move, Reuters reported that a confidential filing was submitted to the SEC earlier this month.

Tencent currently runs music service providers - Kuwo, QQ Music and KuGuo - which gives it control over three-quarters of the Chinese music streaming market. Spotify, the Swedish music streaming service had listed on US stock exchanges earlier this year.

According to the prospectus filed by Spotify before its IPO in April, it said that last December, Tencent and Spotify had agreed to a share swap. Post this, Tencent got a 7.5 percent stake in the Swedish streaming company.

The popularity of streaming services has led to the growth of the global recorded music industry, which posted a third consecutive year of positive revenues. 

Tencent Music is a subsidiary of Chinese tech conglomerate Tencent Holdings.

The company’s gaming arm is also seeing rapid growth with its PUBG game reported to have over three million concurrent players as of January this year.