Thursday, 6 August 2020

ByteDance investors value TikTok at $50 billion in bid

REUTERS/Dado Ruvic/Illustration

BEIJING: Some investors of TikTok’s parent company ByteDance seeking to take over the popular social media app are valuing it at about $50 billion, significantly more than peers such as Snap Inc, according to people familiar with the matter.

ByteDance is considering a range of options for TikTok amid pressure from the United States to relinquish control of the app, which allows users to create short videos with special effects and has become wildly popular with US teenagers. The app’s success has helped turn ByteDance into one of only a handful truly global Chinese conglomerates.

The Committee on Foreign Investment in the United States (CFIUS), a US government panel which reviews deals by foreign acquirers for potential national security risks, has raised concerns about the safety of the personal data that TikTok handles under its Chinese owner, Reuters has previously reported.

Privately held ByteDance has received a proposal from some of its investors, including Sequoia and General Atlantic, to transfer majority ownership of TikTok to them, the sources said. It has also fielded acquisition interest in TikTok from other companies and investment firms, the sources said.

The investors’ bid values TikTok at 50 times its projected 2020 revenue of about $1 billion, according to the sources. By comparison, Snap is valued at 15 times its projected 2020 revenue, at about $33 billion, according to data provider Refinitiv.

It is unclear whether ByteDance’s founder and CEO, Yiming Zhang, will be satisfied with the offer. ByteDance executives recently discussed valuation projections for TikTok that exceed $50 billion, one of the sources said.

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