Beijing Bytedance Technology Co, which owns China’s leading news aggregator Jinri Toutiao，has reportedly raised USD 2.5 -3 billion in a pre-IPO funding round at a valuation of 75 billion dollars.
According to All Weather TMT report, a clutch of investors including SoftBank, Alibaba and private equity firm KKR are lead investors. YF capital, which represents Alibaba, has already invested Jinri Toutiao, one of the sources said.
Bytedance and Alibaba declined to comment on this story.
Bytedance was targeting a valuation of between 70-75 billion dollars in the latest fundraising, according to Reuters.
Unlike most Chinese startup companies, Bytedance stays independent from China’s tech giants – Baidu Group, Tencent Holdings and Alibaba Group (BAT).
It is said that Alibaba held talks with Bytedance earlier this year about a potential acquisition or investment, but was turned down by Jinri Toutiao, according to BBC. But in April, Alibaba had publicly denied the investment in Jinri Toutiao.
Now, there is a high possibility that Bytedance seeks for a tech giant’s support to make the content aggregator’s further moves steadier.
Bytedance‘s last fundraising round was at the end of 2017, and the valuation exceeded USD 30 billion back then. Based on its USD 75 billion valuation, it could rival the biggest news feed competitor—Baidu.
As a “unicorn” - private firms valued at 1 billion dollars or more, Bytedance could rank the world’s third-largest internet company, right after ride-hailing company Uber Technologies which is valued at USD 120 billion and Ant Financial which is valued at USD 150 billion. However, CB Insights values Uber at USD 72 billion.
Bytedance has achieved a quick success. Its brand TikTok’s DAU reached 150 million by the end of October in China. TikTok’s pre-money valuation could reach USD 30 billion.
Bytedance’s first brand is news aggregator Jinri Toutiao, which utilises algorithms and artificial intelligence to customize news, online books, videos and other content for users, with a great amount of its revenue coming from commercial ads. Its DAU is around 400 million in China and 100 million overseas.
Since late last year, Bytedance built an entertainment segment to earn more profits, with includes short video streaming apps and a popular lip-sync platform Musical.ly, which it shuttered and merged with TikTok eventually.
While the BAT companies are competing on their existing business models, emerging companies like Bytedance are trying various alternatives and are fast reaching out to millennial crowd across the globe. Perhaps, the quick rise in the DAU could be one of the main reason for its high valuation, which in turn is attracting big investors.
(Story by Diqing Liu, an intern at The Passage.)