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SoftBank helps China's Bytedance sing a US$75b tune; firm could muscle in on the empire of US$400b Tencent
SOFTBANK and other foreign backers are helping China's Bytedance sing a US$75 billion tune. Their mooted US$3 billion cash injection puts the news and video-sharing startup on track to become one of the world's most valuable. Its international hits will help.
The six-year-old startup has built up a stable of buzz-worthy content and entertainment apps. Its Jinri Toutiao is already China's most popular news aggregator, while video-sharing tool TikTok was the world's most downloaded app in the first quarter of this year, according to analytics firm Sensor Tower. That service now touts an impressive half a billion monthly active users worldwide. All this frenetic growth has attracted global attention.
Japan's SoftBank, along with KKR and General Atlantic in the United States are set to participate in a funding round that, according to a source familiar with the matter, will more than triple Bytedance's valuation of roughly US$20 billion a year ago.
The Beijing-based group is still dwarfed by the US$150 billion Ant Financial, the payments and fintech affiliate of Alibaba, but it overtakes Uber in the race to become the world's most valuable privately-held technology company. Bytedance has two things going for it. The company has carved out a niche by tapping into China's short-videos craze.
Everyday, millions of users spend nearly an hour watching, sharing and discovering 15-second clips of themselves, friends or internet celebrities dancing and lip-syncing on Bytedance's addictive apps.
The company doesn't disclose financials, but its reach should be a big draw for advertisers. And unlike ride-hailing or food delivery, videos and newsfeeds don't require huge amounts of cash-burning subsidies to attract new users.
That would make it cheaper for the smaller Bytedance to muscle in on the empire of US$400 billion Tencent, which owns China's largest social network and chat app, WeChat. Moreover, overseas expansion already sets Bytedance apart.
TikTok's popularity aboard is even more impressive next to WeChat's failed push to win users outside of China. The extra cash could signal Bytedance is gearing up for new initiatives at home and in new markets.
That will be music to investors' ears. REUTERS