It seems that the race has begun to provide the Chinese audience with their daily dose of news and it’s getting tighter with each passing day with Qutoutiao, a rival to TikTok parent Bytedance, netting an instalment of sizable backing, according to a report by TechCrunch. The deal comes close on the heels of the initial public offering (IPO) through which the company raised nearly $84 million.
As per the report, China’s e-commerce giant Alibaba is injecting $171 billion into Qutoutiao as a convertible loan. According to the press release, “The ‘Convertible Loan’ will be convertible into Class A ordinary shares of Qutoutiao at Alibaba’s option at a conversion price of US$60 per share, equivalent to US$15 per ADS.”
Qutoutiao is one of the fastest growing mobile content platforms is China and it uses artificial intelligence-based algorithms to deliver customized feeds of articles and short videos to users based on their unique profiles, interests and behaviours. The Shanghai-based company is one among the few that are trying to tap the potential of smaller cities in China, which are outside the influence of bigger urban centres like Beijing and Shanghai.
It is worthwhile to note here that the funding will make Qutoutiao one of the few that has got the backing of both Alibaba and Tencent, the arch rivals who are face-to-face in many avenues. Alibaba’s backing is a significant boost for Qutaotiao, which is trying hard to stave off competition from Bytedance which has not taken a single penny from Baidu, Alibaba, and Tencent, popularly known as the BAT.
Qutoutiao is trying its best to make its mark in the relentless Chinese market and is spending heavily to collect and retain users. Its revenues jumped by 448 percent to stand at $440 million in 2018 and its net loss also soared to $283 million in the year compared to just $14.3 million in the previous period. The company is also working hard on developing an app that could take on Bytedance’s Douyin in China’s growing short-form video market.