Tencent Holdings Ltd has led a pre-IPO investment of more than US$100 million in Chinese personalized news recommendation app Qutoutiao, valuing the start-up between US$1.3 billion to US$1.5 billion, according to local media.
Qutoutiao, which means “fun headline” in English, is rumored to be seeking a U.S. initial public offering of up to US$3 billion as early as this year. Neither Tencent nor Qutoutiao responded immediately to China Money Network’s email seeking comments.
The investment illustrates Tencent’s ambition to expand in news-related media and further rival Toutiao, the personalized news unicorn with a valuation of US$20 billion.
Founded in 2016 and less well known that its larger rival, Qutoutiao has targeted third- and fourth-tier cities in China to achieve growth. It currently ranks 4th in App Store’s news app ranking in China, after Toutiao, Alibaba’s UC Web Browser and Tencent News. Its existing investors include Redpoint China Ventures, Chengwei Capital and China Media Capital.