ByteDance is currently in talks to secure around $2 billion at a $180 billion valuation before listing some of its assets in Hong Kong, sources with knowledge of the matter disclosed, as the Chinese tech group's TikTok service in the United States hangs in the balance.
ByteDance is currently discussing the series of funding with existing stakeholders including General Atlantic and Sequoia Capital to raise the targeted amount for the company, the sources who asked not to be named, said.
TikTok has around 100 million active users in the U.S., but it has been under American regulator's radar in the last few months. U.S. President Donald Trump has recently approved an executive order restricting the app unless U.S. companies buy the business.
ByteDance, already the world's most valuable startup is dealing with numerous hurdles in many fronts. TikTok is a threat to U.S. national security because of the way it collects data, Trump insists, citing "credible evidence."
But TikTok has vehemently junked such claims that it shares user information with the Chinese government. ByteDance must protect its app if it wants to stay relevant in the business.
Sources said the funding round is not pre-IPO, as ByteDance has yet to come up with a decision on whether to secure a self-sustaining initial public bid for Douyin or list some of its businesses in the mainland, including Douyin and news aggregator Jinri Toutiao as a package for Shanghai or Hong Kong.
Discussions have also been ongoing to wrap up an initial agreement for Oracle and Walmart to make investments in a new entity to oversee the Chinese app's U.S. businesses.
The company is currently finalizing details in areas like manpower, such as which personnel will be tapped to be part of the new TikTok entity, reports said.
ByteDance has had its valuation rise more than double during the last two years. Its latest funding series dates back two years ago, which gave the company a $78 billion market value following the investment.
Sources said the terms of the funding series may still change as negotiations are ongoing. A ByteDance representative declined to comment, while a representative for Sequoia did not immediately respond to a request for comment.
A $180 billion valuation would come in at about $40 billion higher compared to where ByteDance currently stands and make it more valuable than Twitter, Snapchat and Square Inc. combined.
