ChinaFintech — Baidu’s FinTech Business Raises US$1.9bn

Baidu’s financial services business has secured US$1.9 billion in Series A round of funding led by TPG and The Carlyle Group and joined by investors including Taikang Group and ABC International Holdings. Baidu’s stake in it will be reduced to 42%. The business has been rebranded as Du Xiaoman (度小满).

Established in December 2015, Baidu’s finance arm offers installment payment options to consumers and online investment services to investors. Gross interest income and interest costs in 2017 were RMB3.5 billion (US$543 million) and RMB1.9 billion (US$288 million), respectively. The total assets and total liabilities were RMB 47.0 billion ($7.5 billion) and RMB 41.2 billion ($6.6 billion) as of March 31, 2018, respectively.

Baidu’s online consumer loan business is operated through two companies, Chongqing Baidu Small Loans Co., Ltd.(not official translation), established in October 2015, and Shanghai Baidu Small Loans Co., Ltd.(not official translation), with the bulk of the total loan volume originated by the former.

 (as of June 2017)



Baidu’s Video Streaming Business iQIYI Files for US IPO, the on-demand video streaming service majority-owned by Baidu, has filed with the SEC to raise up to US$1.5 billion.

Source: SEC Filing

Revenue growth rate decreased from 113% in 2016 to 54% in 2017.

Advertising is still the biggest revenue source though an increasing portion is from premium subscription sales.

Subscribers were 10.7 million, 30.2 million and 50.8 million in 2015, 2016 and 2017, respectively. Subscriber revenues as a percentage of the total increased from 33% in 2016 to 38% in 2017.

Source: SEC Filing

Content costs accounted for 69.5%, 67% and 73% of its total revenues in 2015, 2016, and 2017, respectively. Content costs increased by 104% and 67% in 2016 and 2017, respectively.

Daily average user time spent was 170 million hours, 259 hours and 300 hours in 2015, 2016 and 2017, respectively.

The vast majority of the viewing is through mobile. Mobile daily active users were 126 million and mobile monthly active users 421 million as of the end of 2017.

Baidu acquired a controlling stake in iQIYI in 2012 and later merged it with video service PPS which was acquired by Baidu in 2013. Baidu currently holds 69.6% in iQIYI and Xiaomi, the leading smart device maker, owns 8.4% of it.

iQIYI’s major competitors include Youku-Tudou, acquired by Alibaba Group in late 2015, and Tencent Video. None of these on-demand video streaming services has turned a profit, said Robin Li, CEO of Baidu, on the company’s latest earnings call earlier this month.