TikTok Owners Earned Rs 22,500 Crore Profit Last Year; Revenues Double To Rs 1,27,500 Crore
The COVID-19 pandemic has caused many people to install Tik Tok and its user base has grown to more than 2 million users.
ByteDance, parent company to TikTok generated more than more than $3 billion of net profit on over $17 billion in revenue last year. The figures that indicate the world’s most valuable startup is still growing at a brisk rate, according to people with a know of the matter.
Read to find out more…
TikTok-Owner’s Meteoric Rise!
The short-form video app’s revenue for 2019 was more than double the company’s tally of about $7.4 billion in 2018, prompted by phenomenal growth in user traffic that’s drawn advertisers away from Tencent Holdings Ltd. and Baidu Inc. The people asked to maintain anonymity because the financial details are private.
Bloomberg’s sources said the pool of cash means ByteDance is taking its time with its planned Initial Public Offering (IPO), as it now has $6 billion in cash on hand. ByteDance’s IPO at between $150 billion and $180 billion, a premium relative to sales of as much as 20% to social media giant Tencent thanks to a larger global footprint and burgeoning games business, estimated Ke Yan, Singapore-based analyst with DZT Research.
This makes ByteDance more profitable than several Silicon Valley peers, such as Twitter with net income of $1.47 billion, Snapchat which reported a net loss for the year. Google said its video unit YouTube recorded $15.1 billion in ad sales last year.
TikTok’s global rise has been rapid, and the app now poses a threat to it’s American social media rival’s like Facebook and Twitter.
In January 2020, TikTok became the most downloaded app surpassing Facebook and WhatsApp. In Q1 of 2020 TikTok got 31.5 cr new users, the most downloads any app has ever gotten in a single quarter according to analytics firm Sensor Tower.
After TikTok, ByteDance Expanding Into Music, Gaming, E-commerce!
ByteDance, led by Zhang Yiming, is becoming a viable rival to the dominant American online behemoths, Facebook Inc. and Alphabet Inc. Facebook unit Instagram
ByteDance has emerged as one of the tech industry’s most surprising success stories, an innovative Chinese company challenging the global dominance amongst U.S. internet rivals. It draws some 1.5 billion monthly active users to a family of apps that includes the TikTok, its Chinese twin Douyin and the news service Toutiao.
The company owes much of its success to TikTok, now the online repository of choice for lip-synching and dance videos by American teens. The company is also pushing aggressively into a varied new arenas from gaming and search to music.
ByteDance amounts to $150 billion and $180 billion in an initial public offering,
This month, the ByteDance poached Walt Disney Co. streaming czar Kevin Mayer to become chief executive officer of TikTok.
ByteDance has also quietly been foraying into music streaming, announcing the launch of its music streaming app ‘Resso’ in India in March of this year, as well as gaming.
Ke Yan said that neither social media company harbors much debt. He also said, “None of the Chinese tech companies has achieved this level of success in the global market before ByteDance. The fact that ByteDance is making profit, if true, and sitting on a $6 billion cash pile means that it is not in a rush at all to come to market to raise capital, and therefore less likely to offer the shares at a more reasonable price for IPO investors.”
Alongwith gaming and music, ByteDance is expanding into e-commerce as well. This year, it kicked off a wave of hiring and envisions hitting 40,000 new jobs in 2020, hoping to match the headcount of e-commerce giant Alibaba Group Holding Ltd. at a time technology corporations across the globe are furloughing or reducing staff.
The company had very preliminary discussions about an IPO last year, but is in no rush to go public given its financial performance, people have said. It now has more than $6 billion of cash on hand, the people said.
Success Despite Controversies!
ByteDance, which is backed by SoftBank Group Corp., General Atlantic and Sequoia, is already the world’s most valuable startup, according to researcher CB Insights. Bloomberg News reported, some private trades recently valued the company between $105 billion and $110 billion on the secondary markets. It has also traded as high as $140 billion, one person said, making it one of the most highly valued private companies of all time.
The Softbank backed company’s success has come despite American lawmakers raising concerns about privacy and censorship. In a rare bipartisan effort in Washington, Republican Senator Tom Cotton and Senate Minority Leader Chuck Schumer last year urged an investigation into TikTok, labeling it a national security threat.
Twitter Inc. on May 26 added a fact-checking link to two of Trump’s tweets to his 80 million followers. President Donald Trump on May 27 threatened to regulate or shut down social media companies, tweeting that the platform attempts to silence conservative voices.