Baidu-backed iQiyi files for US IPO of $1.5b

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IQiyi, a video-streaming service provider backed by Baidu Inc, filed for an initial public offering in the United States on Tuesday, Bloomberg reported.

The Beijing-based company filed with an offering size of $1.5 billion, according to a filing with the US Securities and Exchange Commission. However, the figure is likely to change. The company is aiming for a public market valuation of as much as $10 billion, Bloomberg reported earlier.

Goldman Sachs Group Inc, Credit Suisse Group AG and Bank of America Corp are lead underwriters to the IPO. IQiyi has applied to list its American depository shares on Nasdaq under the symbol "IQ".

Upon the completion of this offering, Baidu, the Chinese search engine giant, will beneficially own all of the company's outstanding high voting Class B ordinary shares and continue to be its controlling shareholder, according to the filing.

As of the end of 2017, iQiyi, a Chinese-style Netflix, has 50.8 million subscribers. The company posted a net loss of $574 million on total revenue of $2.7 billion last year.

The platform is one of the largest online video streaming platforms in China, which competes fiercely with its rivals Tencent Video and Youku Tudou. According to data provider iResearch, iQiyi is the largest such platform in terms of user time spent and average total monthly active users in 2017.

In February last year, iQiyi raised $1.53 billion in new funds. Baidu invested $300 million via the form of a convertible bond issuance. Other backers include Hillhouse Capital, Boyu Capital, IDG Capital and Sequoia Capital China.

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