If you needed more proof of China’s role as Hollywood’s new sugar daddy, here you go: STX Entertainment, the studio that brought you Bad Moms, just announced it has landed “significant strategic investments” from Tencent Holdings, China’s leading social network and online entertainment firm, and from Hong Kong-based PCCW, a telecom, media and IT solutions player.
According to a release issued by STX on Thursday afternoon, existing investors like TPG Growth, Hony Capital (a Chinese private equity firm) and Gigi Pritzker also put in additional funds. Financial terms of the deal were not disclosed, but it puts STX’s estimated valuation at close to $1.5 billion.
The recently-issued release said that the new investments will be used to “accelerate STX’s expansion into a fully integrated and diversified media company, designed to capture new global opportunities arising from a rapidly evolving media landscape.”
In normal language, that means that STX is expanding into television, apps, video games, virtual reality and other platforms.
If you haven’t heard of STX, that’s because it was conceived just two years ago. The new studio was founded by longtime Hollywood producer Robert Simonds and Bill McGlashan, head of TPG Growth. It focuses on making films with mid-range budgets (usually considered to be anywhere from $20 to 60 million). The well-funded company has made Chinese investments a part of its DNA from the get-go. Last year, it also announced a three-year deal with China-based film firm Huayi Brothers to produce 12 to 15 movies annually.
New movie studios don’t pop up in Hollywood every day, largely because they are incredibly capital-intensive. In a short time, STX has amassed some high-profile investors both domestically and in China. And the studio has managed to churn out some hits, including the aforementioned Bad Moms and The Gift. But not all of its bets are paying off–even with China’s money.
STX isn’t the only Hollywood company benefiting from the infusion of Chinese cash. Earlier this year, the Dalian Wanda Group shelled out about $3.5 billion for a 49% stake in Legendary Entertainment. Stay tuned for more, because China and Hollywood’s love affair is likely just beginning.