Author(s): Raghu Gopal
For anyone outside China, this company was easy to miss. But it's not flying under the radar any longer.
ByteDance, a developer of a suite of popular content apps, is on its way to becoming the world's most valuable start-up based on its latest funding round. The company from Beijing is seeking to raise $2.5 billion to $3 billion, an amount that would put its valuation at between $70 billion and $75 billion. If successful, the cash injection would potentially place ByteDance ahead of Uber, which is valued at $68 billion. SoftBank, KKR and General Atlantic are the lead companies looking to take part in the huge funding round.
ByteDance was founded only in 2012 and has become best-known for its Jinri Toutiao news app and the Douyin short-video platform, also called TikTok outside China. The Toutiao app uses artificial intelligence to serve users a steady diet of personalized content.
However, it is short videos that have really propelled ByteDance into the big leagues thanks to the popularity of streaming services in China. Its TikTok app lets users shoot and edit footage, add filters and share their videos across platforms like Weibo. The short-video format has become an instant hit among the younger generation, and the app has attracted 500 million monthly active users as of July 2018. ByteDance recently acquired Musical.ly, a service with about 100 million users that's being merged with TikTok.
ByteDance is one of the largest companies in a new waveof Chinese Internet giants starting to operate with specific services at comparable user numbers to Tencent and Alibaba. Unlike Didi Chuxing or online delivery platform Meituan-Dianping, ByteDance has grown without the backing of Tencent or Alibaba into one of China's most popular services.
One of the biggest hurdles the company must now overcome is turning viewership and the buzz that surrounds it into dollars. ByteDance is expanding its advertising sales operations, particularly for Toutiao, which enjoys a huge reach and draws significant attention. However, it needs to tread carefully to avoid any censorship battles. Indeed, ByteDance has already had a skirmish with the Chinese authorities over an app for sharing rude jokes and videos, which it was forced to close down.