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Summary
- ByteDance Ltd shot to fame primarily because of its famous social media app TikTok, which has become the latest fad among internet users.
- Reports quoting sources said that private trading saw ByteDance’s valuation zoom past US$ 250 billion in the secondary market in recent weeks.
- ByteDance’s valuation has spiked around the same time as reports of a possible initial public offering (IPO) began to crop up.
ByteDance Ltd shot to fame primarily because of its famous social media app TikTok, which has become the latest fad among internet users. But what made the Chinese company gain massive traction over the past week in the stock market sphere is its present valuation.
While ByteDance is a privately held company and not available on the public markets yet, reports quoting sources said that private trading saw its valuation zoom past US$ 250 billion in the secondary market in recent weeks.
Let’s find out more about this Chinese tech giant.
A Little Bit of a Background on ByteDance Ltd
ByteDance was founded by entrepreneur Zhang Yiming back in 2012. The company first came up with social media platform Neihan Duanzi and the first version of new media forum Toutiao in the same year. Around 2016, it launched Toutiao Video, which was then reinvented as Xigua Video, aka Watermelon Video.
A year later, in 2017, ByteDance acquired social media startups Musical.ly and Flipagram, which it then merged with its app TikTok in 2018 to make a single app. The app, known as Douyin in China and as TikTok everywhere else, went on to become a global sensation.
ByteDance IPO On the Cards?
ByteDance’s valuation has spiked around the same time as reports of a possible initial public offering (IPO) began to crop up. Sources quoted by some media reported claimed that Mr Zhang Yiming is looking into an IPO but the transactions at the moment are being kept private.
©Kalkine Group 2020
Although ByteDance has not made any official statement yet, the IPO rumors have been fanned further by the appointment of Chew Shou Zi as its chief financial officer last week. Investors seem to be taking a hint from the fact that Mr Chew, a former head of finance at Xiaomi Corp, had supervised its IPO a few years ago.
Including its latest financing from a secondary market on Tuesday, March 30, ByteDance is said to have raised about US$ 7.4 billion in total from 11 rounds of funding, according to CrunchBase.
What Could be in Store For ByteDance?
The primary factor to consider when talking about ByteDance’s future prospects is the Chinese government’s “anti-monopoly” crackdown on tech giants in the country. Conglomerates like Tencent and Jack Ma’s Alibaba and Ant Group are already facing the heat. President Xi Jinping even reiterated in March that his government will continue to keep a close watch on the “platform” companies that have secured massive influence and wealth.
In the US, ByteDance had a rough time under former President Donald Trump’s regime, with the administration was probing it on the charges of national security concerns.
Source: Pixabay
While new President Joe Biden has given the company some hope with the promise of reviewing the situation, it continues to face uncertainty, especially with the possibility of the US administration forcing it to sell off TikTok.
On the corporate front, reports until a few months ago speculated that ByteDance may be looking into taking some its businesses public, such as Douyin. However, latest rumors point at the possibility that the entire company could be heading for a public listing soon.
