China’s internet giant Tencent is set to raise at least USD 1 billion from an initial public offering of its music unit next year, according to unnamed sources cited by Bloomberg. The company’s Tencent Music streaming and downloading service is underpinned by three separate platforms – QQ Music, KuGou and Kuwo – and already has twice as many paying customers as Spotify. No decision has yet been taken on where the unit will list, added the sources.
Tencent is looking to capitalise on digital music sales in mainland China that are expected to surge 88 percent within four years. The service already offers more than 17 million songs to 700 million monthly active users, with 120 million having paid to stream or buy music, compared with Spotify’s 60 million paid users.
The news comes after Tencent and Spotify announced earlier this week that they have made equity investments in each other, with the aim of strengthening relationships between the company’s music streaming platforms. Tencent will also invest in Spotify through secondary purchases.
