Some investors of TikTok’s parent company ByteDance seeking to take
over the popular social media app are valuing it at about $50 billion,
significantly more than peers such as Snap Inc, according to people
familiar with the matter.
Beijing-based ByteDance is considering a
range of options for TikTok amid pressure from the United States to
relinquish control of the app, which allows users to create short videos
with special effects and has become wildly popular with U.S. teenagers.
The app’s success has helped turn ByteDance into one of only a handful
truly global Chinese conglomerates.
The
Committee on Foreign Investment in the United States (CFIUS), a U.S.
government panel which reviews deals by foreign acquirers for potential
national security risks, has raised concerns about the safety of the
personal data that TikTok handles under its Chinese owner, Reuters has
previously reported.
Privately held ByteDance has received a proposal from some of its
investors, including Sequoia and General Atlantic, to transfer majority
ownership of TikTok to them, the sources said. It has also fielded
acquisition interest in TikTok from other companies and investment
firms, the sources said.
The investors’ bid values TikTok at 50
times its projected 2020 revenue of about $1 billion, according to the
sources. By comparison, Snap is valued at 15 times its projected 2020 revenue, at about $33 billion, according to data provider Refinitiv.
It
is unclear whether ByteDance’s founder and CEO, Yiming Zhang, will be
satisfied with the offer. ByteDance executives recently discussed
valuation projections for TikTok that exceed $50 billion, one of the
sources said.
TikTok is growing rapidly as it rakes in more cash
from advertising, and its management team expects to achieve $6 billion
in revenue in 2021, one of the sources said. ByteDance, which owns other
apps including TikTok’s Chinese counterpart, Douyin?, has set itself a
revenue target for 2020 of about 200 billion yuan ($28 billion), Reuters
has previously reported