Abu Dhabi's BlueFive co-leads $3B round for China's Kling AI, the largest raise ever for a video model company

BlueFive Capital, the Abu Dhabi-based alternative asset manager, has co-led the roughly $3 billion funding round for Kling AI, the video-generation unit spun out of Chinese short-video giant Kuaishou, in the largest financing ever raised by a video model company.

The round values Kling AI at approximately $18 billion post-money, trimmed from the $20 billion Kuaishou floated when it first explored a spin-off in April. BlueFive co-led alongside CPE, Guofang Venture Capital, Tencent, Zhongguancun Science City Fund and CITIC Securities, with at least 38 investors participating including Alibaba Cloud, Baidu, ICBC and China Construction Bank. Kuaishou retains a controlling 68.33% stake and plans to begin a Hong Kong listing process for the unit within 12 months.

Launched in June 2024, Kling AI generates video from text prompts and images, and stands out in its category for having revenue behind its valuation. First-quarter revenue exceeded 650 million yuan ($96 million), up more than 300% year on year, with its annualised run rate reaching $500 million in March, a fivefold increase in twelve months.

The raise lands after OpenAI shut down its consumer Sora app in April and Runway pivoted away from commercial video, thinning the field, and Tencent's $200 million participation came despite the company owning Hunyuan, a rival video model.

For BlueFive, the deal deepens a China footprint built around a Beijing office opened last year, and Reuters reported in September that the firm was raising a $1 billion fund for private equity investments in Asia. Hazem Ben-Gacem, BlueFive's founder and CEO, said securing an allocation in a round of this scale "validates our ability to access premier, highly sought-after opportunities alongside established investors."

The Kling cheque caps a run of large and varied bets from the firm this year, spanning a $230 million seed for Abdallah Abu-Sheikh's Mal, the largest seed round recorded in MENA, a $50 million investment in Abu Dhabi AI company Origen, a co-lead of CNTXT AI's $60 million Series A in June, and the $250 million round it led that same month for CargoX, the UAE autonomous delivery platform that emerged from stealth under former Talabat CEO Tomaso Rodriguez, alongside a 70% stake in UAE dredging firm Gulf Cobla acquired this month.

Founded in 2023 by former Investcorp executive Ben-Gacem and backed by Bahrain's sovereign fund Mumtalakat since last year, the firm now describes itself as managing $15 billion in assets, up from the $4.4 billion it reported as of last November.