China’s Tencent Music files for US IPO, tipped to be one of technology’s biggest

Tencent Music Entertainment Group, China’s largest music streaming company, has filed for an IPO in the US – looking to raise US$2 billion.

Both the global music and tech sectors are looking closely at the move, as it could be one of the biggest tech IPOs to date.

According to Dealogic, Tencent Music may reach a value of $25 billion – double the $12.5 billion its estimated worth in December 2017 when it swapped shares with Spotify.

In its filing, Tencent Music revealed revenue doubled in 2017 to $1.66 billion, with a profit of $199 million.

In the first six months of 2018, revenue was  $1.3 billion. Gross profit was $526 million, a 151.7% jump from the first half of 2017.

About 70% of its revenue came from streaming, (through QQ Music, Kugou, Kuwo and WeSing), merchandise and online karaoke.

It has 800 million total unique monthly active users.

According to the SEC filing, Warner Music Group and Sony Music Entertainment have recently acquired shares in the company for around $200 million.

Both were early investors in Spotify, and earned great yields when they cashed in after the Swede’s IPO this year.

Warner earned $500 million while Sony generated $750 million from selling 50% of its stake.

China’s battle against entrenched piracy and the global streaming boom has made it into the Top 10 music markets in the world.

Last year, its 27% jump in streaming revenue saw the country’s overall music revenue grow 35%.

The Western music business has been investing and collaborating with local firms – from Sony’s dance label to the local version of London’s Abbey Road Studios.