ByteDance, the Chinese firm that owns the popular TikTok short video social media platform, has reportedly surpassed a market valuation of more than $100 billion. According to people with knowledge of the matter, the company managed to reach the milestone through a recent private share transaction.
Details regarding the private share transaction remain sparse, but the recent claim indicates that the company may have managed to raise its value more than 33 percent compared to its previous valuation. ByteDance had disclosed in its last major funding round more than two years ago that its private valuation had reached about $75 billion.
The company has yet to disclose its actual private valuation, but some reports have estimated that it could be as much as $140 billion. Although, it has to be noted that the prices paid in private transactions may not reflect the broader value placed on the company's shares by market investors. If the estimates are correct, ByteDance's market valuation could place it in the ballpark of other industry giants such as IBM and HSBC Holdings.
Given the recent rise in popularity of the company's TikTok platform amid the shelter-in-place orders and lockdowns due to the coronavirus pandemic, it may be possible that investors would price its stocks much higher than initially anticipated.
Most investors are keen to grab a slice of the company's business, particularly its rapidly growing user base that has already exceeded 1.5 billion monthly active users. The number of users and engagements on its TikTok platform currently competes with platforms operated by its much larger rivals, including Alibaba and Tencent.
Apart from TikTok, the company also operators Douyin, a Chinese version of the popular short-video app, and its popular news service Toutiao. Last year, ByteDance had explored the possibility of floating its shares in an exchange outside China. The company was at one point in an early stage of launching a share sale. However, analysts have pointed out that the company is currently well-funded, which makes the possibility of a share sale unlikely in the short-term.
With the billions of dollars the company has raised through private share sales and funding rounds, the company is rapidly expanding its business into newer areas. Earlier in the year, the company had launched a massive hiring campaign, opening up more than 40,000 new positions for its projects in industries such as e-commerce and mobile gaming. Combined with its existing workforce, ByteDance's headcount could match or exceed Alibaba's workforce.
