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Highlights
- TikTok's parent company ByteDance had earlier shelved its IPO plans after coming under the radar of Chinese regulators over its data security practices.
- In 2020, ByteDance secured US$ 5 billion in funding from investors, and it was then valued at around US$ 180 billion.
- TikTok is under scrutiny outside of China too. The video-sharing platform is facing a billion-pound lawsuit in the United Kingdom.
After calling off its listing plans earlier this year, it seems that TikTok's parent company ByteDance is planning for an initial public offering (IPO) in Hong Kong once again.
The Beijing-based multinational internet technology company had earlier shelved its IPO plans after coming under the radar of Chinese regulators over its data security practices.
Some people may confuse ByteDance's IPO plans with that of TikTok’s. However, it is important to note that the TikTok IPO might happen next year, but it will be separate from that of ByteDance.
Chinese regulatory authorities have been increasing their scrutiny on tech giants, which saw ByteDance come under its radar too. However, ByteDance is reportedly in the process of submitting its filings with the Chinese authorities for review.
In 2020, ByteDance secured US$ 5 billion in funding from investors, and it was then valued at around US$ 180 billion. But some reports suggest that the actual valuation of the Chinese company could have soared past US$ 400 billion.
Notably, the multinational internet technology company has approximately 1.9 billion monthly active users (MAUs) worldwide between TikTok and its Chinese counterpart, Douyin. By the time ByteDance goes public, it is expected that the company will register over two billion MAUs.
Also Read: Why TikTok Founder ByteDance Became So Popular Among Investors?
Crackdown on big tech companies
China is keeping a strict watch on big tech companies after they were accused of monopolistic business practices and mismanagement of user data.
In April, Alibaba Group was slapped with a hefty fine of US$ 2.8 billion, while companies like ByteDance were ordered to follow stringent financial rules.
Chinese transport company Didi Chuxing Technology, on the other hand, had gotten successfully listed on the New York Stock Exchange, but just days later, it was removed from Chinese app stores after regulatory crackdown.
In China, companies with one million or more users are required to undergo a series of security reviews before going public in an overseas stock market. Since ByteDance has billions of users, the company might not opt to list its shares on international stock markets.
Also Read: Alibaba Fined A Record $2.75 Billion By Chinese Authorities
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TikTok is under scrutiny outside of China too. The video-sharing platform is facing a billion-pound lawsuit in the United Kingdom as it is accused of mishandling children's data.
In July, it removed over seven million accounts as they were reportedly being operated by children who were less than 13 years old.
Bottomline
ByteDance aspires to become one of the largest companies in the world and that may be possible after it becomes a public company.
Since the company is already popular across the world, it might attract investors' attention once the financial details and company prospectus are out in the public domain.
