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Between President Trump’s attempt to ban the app in the U.S.—forcing it to find a buyer—and its new CEO quitting after just three months on the job, a lot has happened.
Let’s take a look.
A brief history of TikTok
The app initially known as Musical.ly was launched in 2014 and based in the Los Angeles area. The company raised at least $150.4 million in funding from backers including GGV Capital and GX Capital, and became popular among teens to sing along with songs and make short-form videos. Musical.ly was valued at around $533.5 million after its Series C round in May 2016, according to Crunchbase.
In November 2017, Chinese company ByteDance announced it was merging with (read: buying) Musical.ly. The reported price was about $800 million.
ByteDance rebranded Musical.ly into TikTok, its own app, in August 2018, according to The Verge. Now, the app has been downloaded more than 2 billion times, per Sensor Tower, and is growing increasingly popular among demographics other than teens. It has created stars out of teen users like Charli D’Amelio and Addison Rae, and has become one of the hottest social media apps in recent months.
A look back at its funding history
Before it was rebranded as TikTok, Musical.ly raised at least $150.4 million in funding, with its most recent round being a $133.5 million Series C in May 2016, per Crunchbase. It first raised a $250,000 seed round in January 2014.
ByteDance is another story, though. The company has raised at least $7.4 billion in total funding from investors including Tiger Global Management, Sequoia Capital China, SoftBank and General Atlantic. Here’s a closer look at the TikTok parent company’s funding and valuation:
According to CNBC, ByteDance is getting close to a deal to sell its U.S., Canada, Australia and New Zealand operations for somewhere in the $20 billion to $30 billion range. It’s unclear what ByteDance’s valuation and future will look like after the sale has been completed.
Why is it for sale?
As ByteDance is based in China and relations between the U.S. and China have grown increasingly strained, concerns have also come up about data privacy. More specifically, the U.S. government is worried that ByteDance collects information about its users and could share it with the Chinese government, thus allowing it to track U.S. federal employees, conduct corporate espionage, etc.
The U.S. Senate unanimously voted to ban the TikTok app from government phones, according to Reuters. President Trump issued an executive order in early August to ban transactions with ByteDance unless the company found an American buyer to purchase its U.S. operations.
TikTok has denied that it shares user information with any governments, per Cyberscoop.
Who’s trying to buy TikTok?
Since President Trump’s executive order, reports have come out that Microsoft was looking to buy TikTok. Then Oracle reportedly entered the mix, and now, Microsoft and Walmart are also apparently teaming up to acquire the app.
At first glance, all three players seem out of left field. Oracle and Walmart aren’t in the social media business, and Microsoft is known for its computers and software. The closest Microsoft has gotten to social media is LinkedIn, which is meant for professionals, and the closest it’s gotten to pure fun is with the Xbox.
But TikTok could be good for Oracle from a data perspective, and it could help boost Walmart’s e-commerce business. Add Centricus and Triller to mix, and it’s anyone’s guess who will come out on top.
TikTok will reportedly choose a bidder in the coming days.
Illustration: Li-Anne Dias
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