(Bloomberg) -- Chinese live-streaming company YY Inc. is planning to spin off and list its eSports video platform Huya Broadcasting in the U.S., people familiar with the matter said.
The Twitch-like streaming division is seeking to raise at least $200 million this year to fund expansion in a fledgling but heated sector, the people said, requesting not to be named because the matter is private. YY's American depositary receipts gained as much as 5.5 percent in New York.
Live-streaming of games has attracted the attention of technology giants, with Alphabet Inc.'s Google, Amazon.com Inc., Alibaba Group Holding Ltd. and Tencent Holdings Ltd. all pushing into the sector. The Chinese market alone is expected to generate 3 billion yuan ($462 million) of revenue and attract 140 million users this year, according to IResearch, as users track the online exploits of gamers within PlayerUnknown's Battlegrounds or League of Legends.
Huya's appeal in an IPO may be enhanced by its improved financial performance, and a leading position in terms of traffic among rival platforms. Operating losses at the business narrowed to 10.1 million yuan in the third quarter compared with 159 million yuan a year earlier, Jin Bing, the company's chief financial officer, said during YY's earnings call in November. He declined to comment Thursday on whether the company harbored IPO plans.
Nasdaq-listed parent YY, which grew mobile monthly active users 37 percent to 73 million in the third quarter, allows live-streaming for would-be internet celebrities, who either sing or teach online classes. Users send digital gifts to the broadcaster and YY takes a cut of that revenue. Its Huya subsidiary is focused on games, and in May announced a $75 million Series A round of funding from investors including Ping An Insurance, Banyan Capital and Morningside.
--With assistance from Gerrit De Vynck
To contact the reporter on this story: Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.net.
To contact the editors responsible for this story: Robert Fenner at rfenner@bloomberg.net, Edwin Chan
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