Sunday Times

Clouds part, riches rack up for TikTok

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Just last year, the world’s most valuable startup, ByteDance, was being squeezed from all sides. The Trump administra­tion in the US wanted the Chinese firm, which owns the ubiquitous TikTok video-sharing platform, to get rid of assets. Beijing was cracking down on tech businesses, and India had blackliste­d some of its social-media apps.

For all the obstacles, ByteDance kept growing. Now its founder, 38-year-old Zhang Yiming, is among the world’s richest people — a distinctio­n that lately has carried increased risks in China.

Shares of the company trade in the private market at a valuation of more than $250bn (R3.5-trillion), people familiar with the dealings have said. At that level, Zhang, who owns about a quarter of ByteDance, could be worth more than $60bn, placing him alongside Tencent’s Pony Ma, bottled-water king Zhong Shanshan and members of the Walton and Koch families in the US, according to the Bloomberg Billionair­es Index.

ByteDance, famous for its short-video apps and news aggregator Toutiao, more than doubled revenue last year after expanding into e-commerce and online gaming. It is now weighing options for the initial public offering of some businesses.

“Zhang is someone who’s known for thinking long-term and not easily dissuaded by short-term setbacks,” said Ma Rui, partner at venture-capital firm Synaptic Ventures. “He is set on building an enduring, global business.”

During its last fundraisin­g round, ByteDance reached a $180bn valuation, according to a person with knowledge of the matter. But in the private market, some investors recently were asking for the equivalent of a $350bn valuation to part with their shares, the people have said. ByteDance didn’t respond to requests for comment.

It’s a tough time to be wealthy in China as the government seeks to rein in the country’s most powerful corporatio­ns and their billionair­e founders. Just ask Jack Ma. After opening an antitrust probe, regulators fined Alibaba a record $2.8bn and the central bank ordered an overhaul of his Ant Group so it would be supervised more like a bank.

ByteDance hasn’t been targeted, but its dominance in social media and war chest for deal-making are sensitive areas.

“There are no more silly games in the US with Trump and potential bans or forced asset sales,” said Kirk Boodry of investment research firm Redex. “But the pressure on techshare prices and China in particular might make $250bn a tough sell.”

Zhang, the only son of civil servants, studied programmin­g at Tianjin’s Nankai University, where he built a following by fixing classmates’ computers. He joined Microsoft briefly after graduating, later calling the job so boring he often “worked half of the day and read books in the other half”.

His breakthrou­gh came in 2012, when he created ByteDance’s first hit — a joke-sharing app (later shut down by Beijing’s censors). It then turned to news aggregatio­n before winning more than 1-billion global users with its short-video platforms TikTok and Chinese twin app, Douyin.

It attracted big investors, making it a rarity among Chinese internet startups that usually get absorbed into the ecosystems of Tencent and Alibaba.

Investors are eyeing the IPO of some of ByteDance’s businesses after Chinese competitor Kuaishou Technology raised $5.4bn in February in the biggest internet listing since Uber Technologi­es. Last month, ByteDance hired former Xiaomi executive Chew Shou Zi as its CFO, filling a long vacant position that will be crucial for its eventual market offering.

For Zhang, it’s not all about immediate payoffs. The affable founder is known for his business philosophy of “delaying satisfacti­ons” as he puts the focus on long-term growth — a message he stressed in his spiel to employees at the company’s ninth anniversar­y celebratio­n last month.

“Keep an ordinary mind, that’s something that sounds easy but important to do,” he said. “Put in the plainest words, when hungry, eat, when tired, sleep.” —

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