Bytedance seeks new funding at up to US$75 bln valuation: report

Beijing Bytedance Technology Co., owner of China’s leading news aggregator Jinri Toutiao, aims to raise about US$3 billion in its latest funding round that would see its valuation soar to as high as US$75 billion, Reuters reports, citing people with direct knowledge of the matter.

The fundraising comes as the six-year-old firm is considering an initial public offering in Hong Kong next year and has been in talks with investment banks for a multibillion-dollar listing, two of the sources said.

Fast-growing Bytedance runs China’s popular news feed Jinri Toutiao and short-video platform TikTok, which was also the world’s most downloaded app in the first quarter.

Founded by entrepreneur Zhang Yiming in 2012, Bytedance is targeting a valuation of between US$70 billion and US$75 billion in the latest fundraising, said one of the people.

That would rank it as the world’s second-largest “unicorn” – private firms valued at US$1 billion or more – eclipsing ride-hailing firm Uber Technologies with a valuation of US$68 billion and trailing only Ant Financial which was valued at US$150 billion after a June funding round.

Bytedance counts venture firm Sequoia Capital, big private equity firms such as KKR, General Atlantic and Hillhouse Capital Group as backers, according to sources.

Alibaba held talks with Bytedance earlier this year about a potential acquisition or investment, but was turned down by the content aggregator, according to two people with knowledge of the situation.

Tencent, on the other hand, once owned a small stake in the company and later exited, sources said.

Bytedance was seeking a US$10 billion valuation in a late 2016 funding round, sources familiar with the fundraising said at the time. About a year ago, the firm was raising at least US$2 billion at a valuation of over US$20 billion.

The valuation exceeded US$30 billion earlier this year and as its new video streaming apps such as TikTok gained user traffic, secondary market trading of its shares would value the firm at over US$50 billion or US$60 billion at times, according to sources familiar with the trades.

Bytedance started from news aggregator Jinri Toutiao, or “Today’s Headlines” in Chinese, which uses algorithms and artificial intelligence to select news, online books, videos and other content for readers, with the bulk of its revenue coming from advertising.

Since late last year, the firm established another business segment – entertainment, with a number of short video streaming apps and a US$1 billion acquisition of popular lip-sync platform Musical.ly, which it shuttered and merged with TikTok last week.

-- Contact us at [email protected]

RC/CG