Chinese e-commerce giant Tencent is spinning off Tencent Music, announced in early July, but its IPO may be halved–raising $2 billion instead of an indicated $4 billion according to a report by Reuters and its IFR publication. It is unclear if the smaller amount of fresh capital reflects a change in the company’s valuation or a smaller number of new shares being sold.Tencent Music reports over 700 million users per month, of which roughly 15 million are paid subscribers. It operates apps allowing the streaming of music and live performances, as well as playing karaoke. Its current form emerged from a merger with streaming rival China Music in 2016, and it has since renewed deals with Universal Music, Warner Music, and Sony Music, along with China’s Huayi Brothers Music and Korea’s YG Entertainment. Following a share swap last year, Tencent Music owns 7.5% of Spotify and Spotify owns 9% of Tencent.Over the past months the company has appeared to seek valuation of $25 billion, with Chinese media speculating that the valuation could reach $30 billion. The new capital component would have reached beyond the $2.42 billion raised by Chinese streaming firm iQIYI earlier in 2018.
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