China’s biggest streaming-music service files for a US IPO

Tencent Music Entertainment filed a document on Tuesday with the Securities and Exchange Commission to go public in the US.

The China-based streaming-music service backed by tech giant Tencent didn’t reveal a target amount it hopes to raise. According to The Wall Street Journal, the initial public offering could value the business in excess of $25 billion, making it it one of the biggest IPOs ever for a technology company.

Tencent Music operates several popular music brands in China — including QQ Music, Kugou, Kuwo and WeSing — and had more than 800 million unique monthly active users in the second quarter of 2018, according to the filing.

For the year ended December 31, 2017, Tencent Music said it earned RMB1.32 billion ($199 million) on revenue of of RMB10.99 billion ($1.66 billion) revenues.

The company also said it generated a profit of RMB2.11 billion ($320 million) in the first half of this year, almost three times as much as its RMB732 million profit during the same period in 2017.

To put Tencent Music into context, Spotify, which went public in April, said it had a net loss of 1.2 billion euros ($1.5 billion) in 2017, on revenue of 4.09 billion euros ($5 billion). Spotify was reportedly valued at $19 billion in the private markets prior to its IPO. It is now worth about $32 billion.

“We are pioneering the way people enjoy online music and music-centric social entertainment services,” Tencent Music said in the filing.

“We have demonstrated that users will pay for personalized, engaging and interactive music experiences. Just as we value our users, we also respect those who create music. This is why we champion copyright protection—because unless content creators are rewarded for their creative work, there won’t be a sustainable music entertainment industry in the long run. Our scale, technology and commitment to copyright protection make us a partner of choice for artists and content owners.”

Tencent music had applied for listing on both the New York Stock Exchange and Nasdaq, and it will trade under the ticket “TME.”

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