China’s Tencent puts big money into ticketing, Snapchat
ON Wednesday, Internet giant Tencent poured in CNY1 billion (US$150.82 million) in funding on one of the country’s biggest online ticketing platforms.
The deal, which values the ticketing provider Maoyan at CNY20 billion (US$3 billion) comes after the company and Tencent-backed Beijing Weiying Technology Co struck a merger deal in September to create a movie ticketing giant, Reuters reported.
Tencent’s additional investment in the newly created entity points to heated competition with rival ticketing app Taopiaopiao owned by tech behemoth Alibaba Group Holding Ltd.
China is the world’s second-largest movie market, where nearly 80 percent of consumers buy tickets from an online platform, according to Big Data Research.
Maoyan, which says it controls 65 percent of China’s online movie ticket market, is also considering an IPO, its spokesman said, though he declined to give a timeline or the planned venue for listing.
Stakes in Snap Inc.
Last Thursday, Tencent flagged video games and ad sales as areas where it thinks it could help Snapchat owner Snap Inc after acquiring a 12 percent stake in the US firm.
Snap disclosed in a US regulatory filing on Wednesday that Tencent recently bought 145.8 million of its shares on the open market, fueling investor speculation about how the two companies might work together.
The US social media company has struggled since its March initial public offering to meet analyst expectations for user growth, and it is locked in fierce competition for users and ad dollars with Facebook Inc.
In describing its stake, Tencent, the world’s largest gaming company by revenue, implied a close relationship with Snap that could go beyond passive investing and involve assisting the US company with strategy.
Investors treated Tencent’s new stake as an investment rather than a step toward an acquisition, while analysts viewed the move as potentially more beneficial for the Chinese company than for Snap.
“The investment enables Tencent to explore cooperation opportunities with the company on mobile games publishing and newsfeed as well as to share its financial returns from the growth of its businesses and monetization in the future,” Tencent said in an emailed statement.
Additional reporting by Reuters