Kling has set a new global record for the largest single-round funding in the video generation large model sector.
Recently, Kuaishou Technology (HKEX: 01024) announced that its video generation business platform Kling completed the delivery of 19.802 billion yuan in external capital increase, equivalent to approximately 2.905 billion US dollars, with a post-investment valuation of about 18 billion US dollars.
The investor lineup was jointly led by CPE Yuanfeng, Guofang Venture Capital, BlueFive, Tencent, CITIC Securities, and Zhongguancun Science City Fund, with participation from Tencent Cloud, Baidu, Huace Film & TV, Mango Industrial Capital, and other institutions.
Unlike typical "patient capital," this funding plan, which took nearly half a year to prepare, had a hard constraint embedded from the start: if Beijing Kling fails to complete an IPO before October 30, 2031, investors have the right to demand a buyback of equity at an annualized simple interest rate of 8%.
This means the funding deal's finalization not only signals that capital is in place but also serves as the starting gun for Kling's accelerated march toward the public market.
Funding backdrop
From the perspective of this funding round, the final delivered external capital increase amounted to 19.802 billion yuan, a slight reduction from the previously disclosed subscription ceiling of 20.447 billion yuan.
As early as July 2, Kuaishou Technology (HKEX: 01024) announced that Beijing Kling signed capital increase agreements with 21 independent investors, with initial investors collectively planning to inject 13.824 billion yuan in cash, while opening a subscription window to accept new investors, setting an overall subscription ceiling of 20.447 billion yuan.
On August 31, Kuaishou Technology (HKEX: 01024) updated its announcement disclosing that institutions such as the National Artificial Intelligence Industry Investment Fund had joined, and Kling's funding plan had filled the paper subscription quota to the 20.447 billion yuan ceiling.
By the official delivery stage on October 30, the actual funding amounted to 19.802 billion yuan, with the shortfall stemming from two entities under Middle Eastern investor BlueFive.
Among them, the originally planned 80 million US dollars (approximately 545 million yuan) subscription obligation was fully terminated; Dakang Lanwu's originally planned 880 million yuan contribution saw 780 million yuan in subscription rights transferred to other investors, with the remaining 100 million yuan no longer paid.
The Kuaishou Technology (HKEX: 01024) announcement attributed this situation to "objective reasons not attributable to any contracting party."
The 780 million yuan share transferred out by Dakang Lanwu was taken up by five institutions: Kingdee Software received 300 million yuan, Wenzhou Ruida received 210 million yuan, Gongqingcheng Junke received 200 million yuan, Muxi Digital received 55 million yuan, and Ningbo Zhichun Huayan received 14.55 million yuan.
Among them, Kingdee Software and Muxi Digital both participated in Kling's investment for the first time.
In addition, previously confirmed investors CPESpruce and Haipu Yihao transferred portions of their shares to Tianjin Yuanfeng Qifeng, Muxi Digital, and Lisi Xingque, respectively.
It is understood that Muxi Digital is a wholly-owned subsidiary of domestic GPU manufacturer Muxi Semiconductor, with a total contribution of 100 million yuan this time, holding 0.08% equity in Kling.
Some market analysts noted that GPU companies investing in video generation large model companies reflects the trend of deep capital-level integration between computing power supply and model training businesses.
After the completion of the aforementioned asset delivery, Kuaishou Technology (HKEX: 01024) holds 66.68% equity and 52.45% voting rights in Kling through LuckyLabs, with core technical personnel Gai Kun holding 3.02% equity but possessing 23.72% voting rights through equity incentives.
In other words, combined with the shareholdings of Beijing Kuailingrui and Kuaishou Technology (HKEX: 01024) CEO Cheng Yixiao, the Kuaishou group still firmly controls Kling.
It is worth noting that among external investors, there is no shortage of internet giants.
Previously, Tencent reduced its Kuaishou Technology (HKEX: 01024) stake in July, cashing out approximately 1.5 billion US dollars and reducing its shareholding from 15.68% to 9.37%. However, after stepping back to a non-major shareholder, it turned to enter Kling through two entities, with Alibaba Cloud and Baidu following suit.
Among them, Alibaba Cloud and Tencent's two entities each contributed 1.363 billion yuan, corresponding to 1.12% equity respectively, while Baidu contributed 341 million yuan for 0.28% equity.
Now, having secured 19.802 billion yuan in external capital increase, Kling has set a new global record for the largest single-round funding in the video generation large model sector.
The implementation of the funding terms means Kling's IPO process has officially entered a countdown.
According to the bet-on-agreement clause disclosed in the funding agreement, if Beijing Kling fails to complete an IPO before October 30, 2031, or fails to complete all restructuring-related regulatory procedures within 9 months, investors have the right to demand the company repurchase equity at "investment principal + 8% annualized simple interest," with Beijing Kling Group bearing joint and several liability.
Growth narrative
To understand the "urgency" of Kling's spin-off and listing, one cannot separate it from Kuaishou Technology's (HKEX: 01024) own business situation.
In the narrative of China's two short video giants, Kuaishou Technology (HKEX: 01024) has long carried the "number two" label.
In 2013, Kuaishou Technology (HKEX: 01024) transformed from a tool product into a short video community; ByteDance's Douyin launched in 2016 and surpassed Kuaishou Technology (HKEX: 01024) in daily active users by 2018.
In e-commerce, Kuaishou Technology (HKEX: 01024) began布局 livestream e-commerce in 2018, while Douyin only concentrated its efforts two years later. But by 2025, Douyin e-commerce GMV reached approximately 4.4 trillion yuan, nearly three times Kuaishou Technology's (HKEX: 01024) approximately 1.6 trillion yuan scale.
Starting from the first quarter of this year, Kuaishou Technology (HKEX: 01024) financial reports no longer separately disclosed e-commerce GMV.
"Rising early but arriving late at the fair" — Kuaishou Technology (HKEX: 01024) has repeatedly moved first yet fallen behind, and its financial data has gradually approached a growth ceiling over the years.
Financial report data shows that in the first half of 2026, Kuaishou Technology (HKEX: 01024) achieved total revenue of 69.251 billion yuan, up 2.36% year-on-year; net profit attributable to shareholders was 6.049 billion yuan, down 32.03% year-on-year.
In terms of revenue structure, online marketing services contributed 58.17% of revenue, up 6.73% year-on-year; livestreaming revenue fell 13.48% year-on-year, and gross margin declined from 55.1% in the same period last year to 51.4%.
Against this backdrop, Kling has become one of the few business segments within Kuaishou Technology (HKEX: 01024) capable of high-speed growth in recent years.
In early 2023, Kuaishou Technology (HKEX: 01024) fully embraced its AI strategy, building a large model product matrix comprising the Kuaiyi language model, Ketu image model, and Kling video model.
Among them, the internally initiated "Puji" project was regarded as the predecessor of the Kling video business. This tool focused on generating 2-second GIF animations from images, but the project subsequently made little progress and was soon shelved.
In early 2024, Kling was officially launched for incubation within Kuaishou Technology (HKEX: 01024); in June of the same year, it opened to creators as a beta feature within the Kuaijing App.
In April 2025, Kuaishou Technology (HKEX: 01024) issued an organizational restructuring announcement, officially establishing the Kling Business Unit, with product, operations, and technology departments under it, led by Senior Vice President Gai Kun, reporting to CEO Cheng Yixiao.
Kling began to become a chapter of its own narrative.
In a year and a half, Kling completed multiple rounds of technological iteration from 1.0, 2.0, 3.0, to O1.
In September 2026, Kling released the Kling 4.0 Flash lightweight version, and on October 15 fully launched the complete Kling 4.0 version. The Kling 4.0 API service was officially opened gradually to global enterprise customers and developers on October 21.
It is understood that Kling 4.0 supports single videos up to 30 seconds, native 4K, 10-bit HDR, and up to 10 keyframes with 15 reference materials.
The previously publicized 135-minute fully AI-generated feature film "ODYSSEUS: The Fall" had all its visuals generated based on the Kling model.
On the commercialization front, Kling's revenue has risen rapidly.
Full-year 2025 revenue was approximately 1 billion yuan; first-quarter 2026 revenue exceeded 650 million yuan, with year-on-year growth exceeding 300%; second-quarter revenue exceeded 850 million yuan, with year-on-year growth exceeding 200% and quarter-on-quarter growth of approximately 30.8%.
Overall, first-half total revenue surpassed 1.5 billion yuan, already exceeding the full-year 2025 level.
From the perspective of ARR (annualized revenue run rate), a metric for measuring the growth potential of SaaS-like companies, Kling's ARR jumped from approximately 100 million US dollars in March 2025 to nearly 500 million US dollars in March 2026, roughly quadrupling in one year.
As of June 2026, Kling's global users surpassed 100 million (covering 224 countries and regions), with nearly 50,000 enterprise customers, both up approximately 67% from the end of 2025.
Goldman Sachs expects its ARR to potentially exceed 1 billion US dollars by the end of 2026, while Morgan Stanley also raised its end-2026 ARR forecast from 860 million US dollars to 1 billion US dollars during the same period.
Competition at the table
When the group's main business growth rate drops to single digits, Kling becomes one of the few segments in Kuaishou Technology's (HKEX: 01024) financial reports that can still tell a "triple-digit growth" story.
However, a high-speed growth business also "burns money" more than traditional main businesses.
Data shows that in 2024, Kling's net loss was 500 million yuan, expanding to 1.9 billion yuan in 2025, with net assets of -9 million yuan as of the end of 2025.
Previously, Kuaishou Technology (HKEX: 01024) CFO Jin Bing estimated at an earnings conference that the group's capital expenditure in 2026 would be approximately 26 billion yuan, an increase of 11 billion yuan compared to 2025, with the increment mainly directed toward computing power, server procurement, and data center construction corresponding to Kling and other foundational large models.
Although growth is impressive, Kling's revenue contribution to the group overall remains limited, while resource consumption such as computing power is enormous, directly pushing up the group's capital expenditure pressure and impacting overall profit margins.
For Kuaishou Technology (HKEX: 01024), injecting Kling-related business assets into the newly established entity Beijing Kling Intelligent Technology Co., Ltd. and promoting an independent listing through large-scale external funding serves both strategic layout and practical capital-level considerations.
Similar logic has appeared in other internet companies, such as Baidu's plan to spin off Kunlun Chip for an independent listing, which is essentially also a divestiture operation of heavy-asset technology businesses.
However, it should be noted that the "first AI video generation stock" table is already crowded with competitors.
From the perspective of market share by computing power consumption, according to AI Prism statistics from mid-to-late May 2026, by average daily computing power consumption share, ByteDance's Seedance accounts for over 80% of the AI video generation field, while Kling accounts for approximately 14%.
According to DataEye's "2026 First Half Domestic AI Drama and Anime Data Report," in the over 20 billion yuan video large model market for AI drama and anime, Seedance's revenue share is approximately 69%, with Kling ranking second at 17%.
On the C-end product dimension, in the first quarter of 2026, ByteDance's Jimeng App reached 13.525 million monthly active users, higher than Kling's average monthly active users of 7.8 million on mobile in March.
Furthermore, in terms of business ecosystem structure, Seedance is embedded in ByteDance's own content machine: upstream, Fanqie Novels continuously produces story materials; in the middle, Jimeng and Jianying handle creation and generation; downstream, Douyin and Hongguo push finished products directly to users; and at the bottom, Volcano Engine supplies computing power and scheduling, enabling a complete business loop from content creation to user distribution.
What Kling lacks is precisely such an internal pipeline that can continuously draw model usage back into the system. Although it can also rely on Kuaishou Technology's (HKEX: 01024) ecosystem synergy, there remains an order-of-magnitude gap with the ByteDance system in computing infrastructure, traffic scale, and capital reserves.
For the "perennial number two" Kuaishou Technology (HKEX: 01024), pushing Kling onto the independent capital market is a bet not only on the future of the AI video industry but also on whether it can, for the first time in the AI era, take the lead seat at the table.
Disclaimer: The content and data in this article are compiled by Guandian based on public information and do not constitute investment advice. Please verify before use.
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