- Tiger Global Management is said to have built up a stake in Tiktok owner Bytedance as it aims to cash in on the short-form video platform’s rising success.
Tiger Global Management is said to have built up a stake in Tiktok owner Bytedance as it aims to cash in on the short-form video platform’s rising success.
The investment fund based in New York — also known as the Tiger Fund — this week disclosed the stake in a letter to the investors.
Tiger Global said it had “bought shares at a low multiple of potential free cash flow over the past 21 months,” the Financial Times said, though the stake’s value was not revealed.
Bytedance has achieved a $75 trillion (£ 60.5 trillion) valuation and counts Softbank and Sequoia Capital among its main investors.
According to the report, Tiger Global started buying shares at approximately half that value and has since increased its stake by investing in secondary markets.
Recent secondary-market transactions offer the Chinese tech giant an implied valuation of between $90bn and $100bn, said several people familiar with the problem.
Throughout the past three years, Tiktok has evolved steadily to become one of the world’s most-downloaded devices.
During the coronavirus epidemic, the video-sharing site is tipped to profit from social distancing initiatives as millions of people are forced to stay at home.
According to third-party data from Sensor Tower, Tiktok racked up nearly 113 m of downloads in February, marking the app’s best month for both installs and revenue.
The figures mark a rise of 96 percent last year in the same month and take the cumulative downloads for life to nearly 2bn.
Tiger said in its note to investors that Bytedance plans to take a 19 percent share of China’s overall online advertising market this year.
In addition, Tiktok has signed a lot of music licensing agreements as it prepares to introduce a new streaming service to challenge Spotify.
But in recent months, Bytedance, who has refuted claims that it is considering a Hong Kong stock market IPO, has faced increased scrutiny over concerns about hazardous content, its use of data and its suspected ties to Beijing.
Last year, the firm was forced to apologize for banning a US teenager who posted a video condemning Uighur Muslims ‘persecution by China.
The US has conducted a national security review of Bytedance’s $1bn purchase of the American Musical.ly social media app, opening the way for Tiktok’s foreign expansion.