Tencent-backed Kuaishou buys rival AcFun in Chinese online video battle

FILE PHOTO: The logo of Chinese video-streaming startup Kuaishou is seen in Beijing, China May 10, 2017. Picture taken May 10, 2017. REUTERS/Stringer

BEIJING/SHANGHAI (Reuters) - Chinese online short video start-up Kuaishou, backed by internet giant Tencent Holdings Ltd 0700.HK, has bought animation and video platform AcFun, the acquired firm told Reuters on Tuesday, amid an intensifying battle over online content.

The platform would keep its independence in branding, operation and development, while Kuaishou would provide support in capital, technology and other resources, an AcFun spokeswoman said. The value of the deal was not disclosed.

Chinese tech giants, including Tencent and rival Bytedance, which owns the popular Douyin platform, are making a major push in the fast-growing online video sector, expected by IHS Markit to hit around 96.2 billion yuan ($15 billion) by 2020.

Platforms like Kuaishou and Douyin allow their millions of users to upload short video clips that are popular with Chinese youth.

AcFun historically is one of the top animation and video sites in China. The platform and recently listed rival Bilibili BILI.O are known among the country's netizens as "station A" and "station B", although their fortunes have recently diverged.

In March, Bilibili raised more than $400 million in a New York initial public offering. AcFun, however, has been facing financial and other troubles including a major server crash earlier this year.

Kuaishou, meaning "fast hand", is valued at about $18 billion, according to a Reuters report earlier this year. The firm is boosting its firepower in live streaming of online video content, as the sector attracts a rush of investment from tech juggernauts Tencent, Alibaba Group Holding Ltd BABA.N and Baidu Inc BIDU.O.

A Kuaishou representative was not immediately available to comment.

Reporting by Pei Li and Adam Jourdan; Editing by Stephen Coates