Douyin, the short-video streaming platform operated by Toutiao, will independently raise funds and is now valued at USD 8-10 billion, according to local media Jiemian citing people familiar with the matter.
The go-to short video app claimed earlier this month that its DAU and MAU have respectively crossed 150 million and 300 million. In Q1 2018, Douyin’s overseas version Tik Tok was the world’s most downloaded non-game app in iOS App Store according to app analytics service Sensor Tower.
Head of Douyin’s product team WANG Xiaowei previously told 36Kr, Chinese biztech media and also KrASIA parent company, that Douyin is an independent product incubated by Toutiao and has no plan for fundraising for the time being.
Douyin operator Toutiao is raising a round and is in talks with KKR and Jack Ma-backed Yunfeng Capital for the fundraising. Toutiao is valued at USD35 billion excluding Douyin’s valuation, according to Jiemian’s source. The company told 36Kr that the news about it not having a plan for fundraising, for the time being, is not true.
Alibaba & Tencent
Toutiao is one of China’s most sought-after companies as it operates some of China’s most popular apps, including the country’s most popular news aggregator Jinri Toutiao, AKA today’s headline.
KrASIA has previously reported that Alibaba looked to invest in Toutiao’s latest round of financing but the deal went sour as ZHANG Yiming, founder and CEO of Toutiao is persistent on the unfettered development of the company.
According to Jiemian’s report, Tencent also intended to participate in Toutiao’s latest round but its attempt also failed. The social networking and gaming giant then invested a little sum through a third-party fund.
Market, Competition & Regulation
China’s short-video streaming market size reached RMB 5.73 billion (USD 881.6 million) in 2017, up 183.9% YoY, and is expected to soar to RMB 30 billion (USD 4.6 billion) by 2020, according to market research firm iResearch.
Like many other fast-growing apps in the country, Douyin is facing a flood of competition. It’s most formidable competitor, Kuaishou, is backed by Tencent. According to the abovementioned local media, Kuaishou has closed a USD 1.4 billion round of financing in April with existing investor Tencent participating. Kuaishou was reportedly valued at around USD 20 billion in the round.
Apart from Kuaishou, Tencent is also betting on its revived app Weishi to fend off Douyin. The company was said to be giving out subsidies worth RMB 3 billion (almost USD 478 million) to influencers to entice them over to its Weishi app.
Toutiao has drawn fire from China’s cyberspace regulators for its advertisements that were disrespectful to heroes. Its news aggregator Jinri Toutiao was removed from local app stores for 3 weeks its joke app Neihan Duanzi has been permanently closed down, as China seeks to clean up its cyberspace.
Editor: Jason Zheng