TikTok valued at $50bn in run-up to potential takeover
INVESTORS at ByteDance, the Chinese owner of TikTok, have valued the controversial app at $50bn (£38bn) ahead of a potential takeover bid.
ByteDance has received interest from investors including Sequoia and General Atlantic to take majority ownership of the viral video app, according to Reuters.
The investors’ bid values TikTok at 50 times its estimated 2020 revenue and would make it one of the world’s most valuable social media companies. Rival Snap is currently valued at $33bn – 15 times its projected 2020 revenue.
TikTok, which was labelled a “potential counterintelligence threat” by senior members of Congress and that the US is considering banning, has 800m users globally.
The $110bn (£86bn) Beijing-headquartered company is believed to be exploring structural changes to separate the US business of TikTok from its global empire.
A formal split could insulate TikTok from widespread suspicion that it could be used as a tool of Chinese state surveillance, as well as allegations that it has enforced Communist Party censorship on its Western users. TikTok denies both claims.
US Treasury secretary Steve Mnuchin said yesterday that TikTok was under federal government review and a recommendation will be made on a potential ban.
Mark Zuckerberg, Facebook’s chief executive, has also openly criticised the company, claiming in a speech at Georgetown University last year that TikTok censored posts supporting prodemocracy protests in Hong Kong.
TikTok refuted the suggestion at the time, saying in a statement that “the Chinese government does not require that TikTok censor content”.
Kevin Mayer, a former Disney executive hired to lead TikTok, came out with a scathing attack against Facebook yesterday, accusing the firm of attempting to dismantle its US operations while attempting to create a copycat app.
Facebook and General Atlantic declined to comment. ByteDance and Sequoia did not immediately respond to requests for comment.