Kuaishou retains control in Kling's new 19.8 billion yuan round

Kuaishou retains control in Kling's new 19.8 billion yuan round

Kuaishou's AI-video company Beijing Kling has completed its second billion-dollar round in a matter of months, with a reported valuation of around $18 billion. But the deal terms — two-thirds equity and just 52.45% of votes for the parent company, plus redemption rights for new investors — say as much about the road ahead as the amount itself.

Kuaishou announced on October 30 that its subsidiary Beijing Kling, the company behind the AI video model Kling, has completed a funding round of roughly 19.8 billion yuan, about $2.98 billion (Reuters). It is the company's second major round of the year: in July it raised $2.8 billion, with Alibaba and Tencent among the investors, at a pre-money valuation of $15 billion.

The amount itself, however, is only part of the story. The terms of the round — the control structure Kuaishou has arranged, and the conditions granted to the new investors — offer a more detailed picture of how the company is preparing for what comes next, even as several key figures remain reported rather than confirmed.

The control: two-thirds of the equity, 52.45% of the votes

According to Reuters, which relays Kuaishou's announcement, the short-video parent company will, through the holding vehicle Lucky Labs, own two-thirds of the equity in Beijing Kling — but only 52.45% of the voting rights.

The gap between the capital share and the voting share means the new investors have come in with capital under terms that limit their formal influence. For Kuaishou, it means Kling remains a subsidiary under controlling influence even after roughly $5.8 billion in new capital in four months. Reuters gives no rationale for the structure, and the sources do not reveal why voting rights were set lower than the equity share — but the concrete allocation is part of the company's own announcement, as relayed by Reuters.

The valuation: reported figures, not confirmed

For the October round, reports summarized by Shattered.io point to a valuation of approximately $15 billion pre-money and around $18 billion post-investment. That same analysis treats the figures itself as reported, not audited.

The uncertainty is worth stressing: in the available source material, Kuaishou has not itself disclosed a post-money valuation. The July round's $15 billion pre-money valuation is reported by Reuters; the $15 billion and $18 billion figures for the October round come from secondary sources. If the reported numbers hold, the round implies only a modest uplift from the July valuation — but that is a conclusion based on reporting, not on published documents.

The new investors — and the takeover of commitments

Among the new investors in the October round, according to Reuters:

• An entity under Hong Kong-listed Kingdee International invested 300 million yuan.
• Gongqingcheng Junke contributed 200 million yuan.
• An entity under Shanghai-listed MetaX put in 100 million yuan.

These three amounts total 600 million yuan — a small fraction of the overall 19.8 billion yuan round. Reuters thus names only certain investors and does not give a complete picture of who owns what after the round.

According to Reuters, the new investors have also partially taken over other investors' commitments and received redemption rights. This is a structure that gives investors a form of downside protection, but the sources say nothing about the specific conditions — for instance, what triggers the rights or what deadlines apply. There is therefore no basis in the source material to tie the redemption rights concretely to listing plans, even though both point to a company in a phase where its capital structure is being shaped with a listing in mind.

The IPO: reported, not confirmed

Bloomberg News reported earlier in October, citing people familiar with the matter, that Kling plans a listing next year and is working with China International Capital Corp (CICC), Goldman Sachs and UBS on a possible share sale of at least $1 billion, targeting a Hong Kong listing (Bloomberg via Yahoo Finance).

This rests entirely on anonymous sources. Neither the size, the timing, nor the bank line-up has been confirmed by the company, and the terms could change. Until Kuaishou itself confirms the listing plans, this is reporting — not a decision.

What the company has not said

Kuaishou has not disclosed how Kling will use the nearly $3 billion. The full investor list and the allocation per investor have likewise not been published. For a round of this size, strikingly few details have been laid out, but the sources offer no basis for drawing conclusions about why.

The competitive landscape

Reuters notes that Kling competes with AI video generation models from OpenAI, Google and TikTok owner ByteDance. The source material does not elaborate on this, so it cannot be analyzed in depth here — but it frames the market the company is raising capital for.

What remains unanswered

Three questions are still open: the complete investor picture after the round, the use of proceeds, and whether the listing actually happens — and if so, when and at what valuation. What the company itself has confirmed is the round's size and the control allocation. The valuation figures are reported, and the listing plans rest on anonymous sources.