A unicorn is born: China’s version of Twitch lands big funding from Tencent, Sequoia

Clearlove, a popular Chinese League of Legends player who streams for fans on Douyu TV.

To many, watching other people play video games sounds like a special rung of hell. But Twitch.tv has proven that the younger generations are into it, and that they’re willing to spend quite a bit of money following their favorite streamers. In China, Douyu TV is doing the same thing. And it just finalized a US$100 million investment to help further its expansion.

Chinese gaming and social media giant Tencent led the round with a contribution of US$61 million. The rest of the funds came from other firms including Sequoia Capital and Nanshan Capital. The round reportedly pushes Douyu TV’s valuation above US$1 billion, making it yet another Chinese unicorn. Interestingly, it also makes Douyu more valuable than Twitch.tv was when Amazon acquired it for US$970 million in 2014.

There’s no disputing that right now, Douyu is the apparent frontrunner.

Tencent’s investment in Douyu this round is both the largest and the most important, as it will deepen the two companies’ strategic collaboration. It’s an investment that Tencent has reportedly been mulling for some time, and it’s no surprise that the two companies decided they can help each other: many of Douyu’s top streamers are playing Tencent-published games like League of Legends. That helps to fuel the game’s continued popularity, because Douyu’s audience is pretty massive. The company claims over 100 million registered users including 15 million daily active users (Twitch, for comparison, claims 100 million monthly users).

Douyu TV is not without domestic competitors. Its largest may be Panda TV, a live-streaming venture created by Wang Sicong, who is the son of China’s richest man. Panda TV doesn’t have the viewership that Douyu TV has, but it does have billionaire backing, and founder Wang may be able to generate some synergy through his ownership of the popular eSports team Invictus Gaming by restricting its players to playing on his platform.

Still, there’s no disputing that right now, Douyu is the apparent frontrunner. And achieving unicorn status while doubling down on its partnership with China’s biggest game publisher certainly isn’t likely to hurt that.