Baidu's iQiyi eying IPO in US next year: report

iQiyi, the video streaming service of Baidu Inc, is looking for an initial public offering in the United States as early as next year, which could value it at more than $8 billion, Bloomberg reported today.

The Chinese firm is about to kick off negotiations with banks and deal arrangers and is aiming for a valuation of as much as $10 billion, Bloomberg reported, citing people familiar with the matter.

IQiyi said in February it raised $1.53 billion in new funds to compete with rivals in the country's hotly contested online entertainment sector.

iQiyi, controlled by search giant Baidu, is China's most popular video streaming service.

However, reports quoting sources clse to the development, said Baidu wants to continue holding a controlling stake in iQiyi upon the IPO via dual-class shares.

The IPO process, however, is in its early stages and the final valuation could change.

IQiyi, the only Chinese service that licenses shows from Netflix Inc, needs to build up its war chest as it battles rival platforms run by Alibaba Group Holding Ltd and Tencent Holdings Ltd. Baidu, which is also investing heavily in artificial intelligence and autonomous vehicles, needs to buy and create more content to sustain its lead among online video platforms, based on time spent.

At $10 billion, iQiyi will be valued at a fraction of Netflix's but surpass listed Chinese rival Leshi Internet Information & Technology Corp.