ByteDance Seeks $2B Before Hong Kong IPO - TikTok News
ByteDance, the parent organization of the widely-used social media platform TikTok, is reportedly exploring options to secure an additional $2 billion in funding prior to the public listing of a significant portion of its international operations on the Hong Kong Stock Exchange, as detailed in a Bloomberg report.
This latest funding round would establish a company valuation of $180 billion, according to sources familiar with the matter who were cited by Bloomberg.
The report indicates that current ByteDance investors, including Sequoia, are being considered to participate in this new investment.
Sequoia was previously a key player in discussions surrounding a potential agreement, championed by the Trump administration, that would have involved Oracle gaining some level of control over the U.S. operations of ByteDance’s most valuable international property – TikTok.
Both Sequoia and Oracle maintain strong connections to President Trump through prominent Republican donors such as Doug Leone, a managing partner at Sequoia, and Safra Catz and Larry Ellison, the leadership and founder of Oracle, respectively.
ByteDance has consistently aimed to launch a public offering encompassing some of its major Asian assets, namely Douyin and Toutiao, which are substantial contributors to the company’s overall revenue.
TechCrunch previously reported that ByteDance achieved 120 billion yuan ($17.2 billion) in revenue last year, based on information from an investor with insight into the company’s financial standing. Approximately 67% of this revenue originated from advertising on its domestic applications, Douyin – the Chinese version of TikTok – and the popular news platform Toutiao. Live streaming services, offered to users of Douyin and another related application, accounted for around 17%. Emerging ventures, including gaming, e-commerce, and TikTok, generated 20 billion yuan, representing roughly another 17% of the total.
The company forecasted its 2020 revenue to reach 200 billion yuan ($28.7 billion), with TikTok and other developing businesses expected to contribute 30 billion yuan, or 15%, according to the same investor. Comparable revenue figures have also been reported by Reuters and Bloomberg.
ByteDance currently holds the position of the most highly valued private, venture capital-backed technology company globally, with a considerable portion of its value linked to the revenue potential of its TikTok assets. The reported interest in new investment, at the indicated valuations, suggests that investors are lessening previous anxieties regarding the potential impact of a TikTok spin-off on the company.
Future developments will likely be influenced by the outcome of the U.S. presidential elections and the ongoing legal challenges. A change in administration to a Biden presidency could potentially halt the proposed agreement between TikTok, Oracle, and Walmart, as well as delay any plans for a separate TikTok public offering within the United States.
There is also reported uncertainty among the parties involved in the TikTok deal regarding the specifics of ownership once the process is finalized and an agreement is reached.
As previously covered in September:
The concerns raised by the U.S. government regarding TikTok stem from multiple factors. Notably, users of the platform successfully disrupted a planned campaign event for the president and transformed it into a public spectacle. More significantly, however, the company’s connections to China raise concerns about the potential exposure of U.S. citizens’ data to the Chinese Communist Party (CCP) and the possibility of manipulation through TikTok’s content moderation policies.
Requests for comment from Sequoia and ByteDance were not answered at the time of publication.
