A group of investors with a stake in TikTok’s parent company, ByteDance, are maneuvering to take over the controversial social media app valuing it at roughly US$50 billion, much more than its competitors, sources told Reuters.
As pressure builds from the US to relinquish control of the app, Beijing-based ByteDance is considering its options, the news service reported.
TikTok is a social video-sharing app that allows users to shoot, edit, and post 15-second videos with filters, music, animation, and special effects. Its success has helped make ByteDance one of the few Chinese conglomerates to have a global outreach.
Two weeks ago, President Donald Trump’s election campaign placed ads on Facebook suggesting that TikTok was “spying” on US users, a claim the company has denied. The campaign to re-elect the president has taken to Facebook to ask people to sign a petition to ban TikTok. The ad refers to the app’s ability to access material stored on phone clipboards, an app that saves text messages, two sources involved in the process told the news service.
The Committee on Foreign Investment in the United States, a government panel that examines overseas acquisitions for potential national security risks, has raised concerns about the safety of the personal data that TikTok handles, Reuters reported.
Last week, PYMNTS reported that investors, led by Sequoia Capital, the Menlo Park, California-based venture capital firm, and New York-based growth equity firm General Atlantic, are in talks with the US Treasury Department and other regulators to see if buying TikTok would allay White House concerns about the app.
The investors’ bid puts TikTok’s value at 50 times above its projected 2020 revenue of US$1 billion, sources told the news service.
SnapChat, the multimedia messaging app, is valued at 15 times its projected 2020 revenue, or US$33 billion, according to Refinitiv, the London-based global provider of financial market data.
There is no certainty that ByteDance will agree to any deal, the sources said.
Last month, there were reports that ByteDance was expanding into financial services with the family that owns OCBC Bank, the global financial services corporation headquartered in Singapore.
ByteDance, General Atlantic and Sequoia declined to comment.
The US Senate Committee on Homeland Security and Governmental Affairs unanimously passed a bill that would bar US federal employees from using TikTok on government-issued devices. It will be taken up by the full Senate for a vote. The House has already voted for a similar measure.
Full Content: Reuters