Tech

Bytedance overtakes Uber to become the world’s largest tech startup

According to Bloomberg, Bytedance Inc. has secured USD$3 billion in investment capital from Softbank to become the world’s most valued start-up to date. Bytedance is a Chinese start-up tech firm that owns two popular Chinese web-based apps called Toutiao and TikTok. Toutiao is a popular karaoke video app and Tautiao is a Chinese news aggregator. Bytedance’s entire net worth is valued in excess of USD$75 billion.

The deal also involved KKR & Co. and General Atlantic, representing a massive monetary influx that grew the Chinese media giant’s expansion abroad. According to an unnamed source, Softbank planned to invest around USD$1.8 billion depending on the value of the shares. Those sources also added that the majority of its investment would be in primary stock. Bytedance is still discussing its proposals with other investors, which could lead to more funding in the future.

Bytedance has been around for over six years, and has gone past Uber Technologies Inc. to become the world’s most valuable start-up. They have gained massive web-based influence on China’s internet scene, and plan to use their new cash overflow to take on Western tech firms. It’s biggest hit overseas is Douyin (TikTok), who has been getting a lot of attention from Tencent Holdings Ltd. and Facebook Inc.

However, Bytedance’s progression has not come without challenges. The tech firm earned over USD$2.5 billion in revenue last year and targeted USD7.2 billion for 2018, but has yet to turn a profit. They started out as a producer for apps that shared dirty jokes before they moved onto their 今日头条 (meaning “Today’s Headlines.”). It then spent a few years building up its user base and perfecting its recommendation systems. Toutiao is a massive hit and its users spend as much time on Toutiao as they do on WeChat, a Chinese app used for social media, messaging, and banking.

Bytedance launched TikTok in 2016 when Karaoke had become ubiquitous in China and Vine-like videos were at the height of their popularity. A year after, the company bought up the popular Karaoke app Musical.ly for USD$800 million. The app now has hundreds of millions of users and is a key member of Chinese’s rising internet giants.

In the past year, Toutiao and Bytedance have encountered problems with Chinese government censors. The news app was removed from app stores while another meme-focused app called Neihan Duanzi was shut down entirely. Bytedance CEO Zhang Yiming sent out an open letter apologizing for “publishing a product that collided with core socialist values.”

However, the tech company’s relation with the Chinese authorities have improved since. Earlier this week, the government recognized Zhang as one of the top 100 entrepreneurs of the past 40 years.