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U.S. Investor Tiger Global Boosts Stake in TikTok Owner ByteDance

By Ding Yi / Mar 31, 2020 06:19 PM / Business & Tech

Photo: VCG

Photo: VCG

U.S. investment company Tiger Global Management has reportedly boosted its stake in TikTok owner ByteDance through a 21-month share purchase at a low multiple of future free cash flow. “Free cash flow” is the cash a company has after subtracting its operating expenses and capital expenditure.

The New York-based investment group began buying ByteDance’s shares when the Chinese unicorn was valued at $37.5 billion and has since increased its investment through share purchases in secondary markets, the Financial Times reported Monday, citing people familiar with the deals.

According to the report, some recent share transactions on secondary markets have given ByteDance an implied valuation of between $90 billion and $100 billion, up at least 20% from two years ago when investors valued it at $75 billion following a $3 billion funding round led by tech conglomerate SoftBank.

The news comes as ByteDance has been seen to be benefiting because of the coronavirus outbreak in China. The virus has helped increase the popularity of its apps as many people in the country are forced to stay indoors to avoid possible infection.

ByteDance’s news aggregator Jinri Toutiao was the second most downloaded non-game app on Apple’s App Store in China in January, when the epidemic began spreading across the country, according to statistics from research firm App Annie. Its short video apps Xigua Video and Douyin, known overseas as TikTok, came in fourth and fifth respectively.

Contact reporter Ding Yi (yiding@caixin.com)

Related: TikTok Establishes Content Advisory Council to Ease Data Security Concerns


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