ByteDance to raise $3b from SoftBank, soaring past Uber and Didi’s valuation

The company behind Chinese news aggregator Toutiao, and short video apps Douyin/Tik Tok, is apparently seeking a new funding round at a US$75 billion valuation.

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ByteDance to raise $3b from SoftBank, soaring past Uber and Didi’s valuation

ByteDance, the developer behind China’s most popular news app Toutiao and short video app Douyin, is reportedly in talks with global investors including SoftBank to raise as much as US$3b at a valuation of around US$75 billion.

Last valued at approximately US$30 billion in late 2017, this potential deal, though still subject to possible changes, would make Bytedance the world’s most valuable startup, according to CB Insights, soaring past the US$72 billion valuations of Uber and Didi’s US$56 billion. CB Insights‘ list does not include Ant Financial, valued at a whopping US$ 150 billion, perhaps due to its close affiliation with Alibaba.

According to the Wall Street Journal, people close to the matter revealed that Toutiao intends to use this new proceeds to fund its global business.

50% of the funds raised will be via convertible bonds. Some examples of the investors include private-equity firms like New York-based KKR,  Beijing-based Primavera Capital Group, US’s General Atlantic; Japan multinational conglomerate SoftBank and an investment firm Tiger Global Management LLC.

Founded in 2012, Beijing-based ByteDance operates some of the most popular artificial intelligence (AI)-driven multimedia content curation and distribution platforms across a wide variety of formats from text, photo, audio to short video. Some of its more popular services include Jinri Toutiao, a text-based news app, Douyin – China’s short-video app, and Tik-Tok (Douyin’s international version).

This rapidly growing company has 500 million monthly active users (MAU) worldwide to date. By Q1 this year, Toutiao’s Tik-Tok became the world’s most downloaded non-game app in the iOS app store, beating big names like Facebook, Youtube, and WeChat, according to app analytics service Sensor Tower.

Not too long ago, in August 2018, Toutiao took another step to boost its revenue via the launch of its ad network Pangolin with which the company expects to add 10 to 20% to its revenue.

The company is also set to join the ranks of other Chinese tech giants in the public markets by 2019.

How ByteDance founder Zhang Yiming brought his startup from times where even investors like Sequoia Capital were skeptical to where it is now is a story in itself, but it’s noteworthy that ByteDance never relied on Alibaba or Tencent for funding and growth. That is something the latest generation of Chinese tech unicorns weren’t able to do. The HK-listed Meituan-Dianping is dependent, in part, on Tencent. The same can be said of the Nasdaq-listed Pinduoduo.

Editor: Ben Jiang and Nadine Freischlad