Tiger Global builds stake in Tiktok owner Bytedance
Tiger Global Management is said to have built up a stake in Tiktok owner Bytedance as it looks to cash in on the growing popularity of the short-form video platform.
The New York-based investment firm — also known as the Tiger Fund — revealed the stake in a letter to investors this week.
Tiger Global said it had “purchased shares over the past 21 months at a low multiple of future free cash flow”, the Financial Times reported, though the value of the stake was not disclosed.
Bytedance has secured a valuation of $75bn (£60.5bn), and counts Softbank and Sequoia Capital among its major investors.
Tiger Global began buying shares at roughly half that value and has since grown its stake through purchases in secondary markets, according to the report.
Recent transactions in secondary markets give the Chinese tech giant an implied valuation of between $90bn and $100bn, said several people familiar with the matter.
Tiktok has grown rapidly over the last three years to become one of the most downloaded apps in the world.
The video-sharing platform is tipped to benefit from social distancing measures during the coronavirus crisis as millions of people are forced to stay at home.
Tiktok racked up close to 113m downloads in February, marking the app’s best ever month for both installs and revenue, according to third-party data from Sensor Tower.
The figures mark a 96 per cent increase on the same month last year, and take its total lifetime downloads to almost 2bn.
In its note to investors, Tiger said it expected Bytedance to take a 19 per cent share of China’s total online advertising market this year.
Tiktok has also signed several music licensing deals as it prepares to launch a new streaming service to rival Spotify.
But Bytedance, which has denied reports it is exploring a Hong Kong stock market float, has faced increased scrutiny in recent months amid concerns over harmful material, its use of data and its alleged links to Beijing.
The company was forced to apologise last year for banning a US teenager who posted a video criticising China’s repression of Uighur Muslims.
The US has also launched a national security review of Bytedance’s $1bn takeover of American social media app Musical.ly, which paved the way for the international rollout of Tiktok.
Tiktok has been contacted for comment. Tiger Global could not be reached for comment.