Sequoia and General Atlantic, the key investors of TikTok want ByteDance to sell a major portion of the company to them, which will not only take the pressure off of the Beijing based company, but also distance the platform from China, the root of the entire fiasco. It is not clear what such a deal would be worth and what ties TikTok in the United States would maintain with its global operations. Media outlet ‘The Information’ had also reported of a similar deal a while back.The company has been valued at a gargantuan $50 billion, which is 50 times its projected 2020 revenue of about $1 billion. These changes could include a new holding company for TikTok and an independent board, one of the sources said, cautioning that no decision has been made. It's unclear how much TikTok's U.S. operations would cost, but Reuters reported TikTok investors value the entire business at $50 billion. It is not clear what such a deal would be worth and what ties TikTok in the United States would maintain with its global operations.There is no certainty that ByteDance will agree to any deal, the sources said. It does have some history botching consumer-facing acquisitions, such as Skype and Mixer. These changes could include a new holding company for TikTok and an independent board, one of the sources said, cautioning that no decision has been made. For reprint rights: TikTok's success has helped turn parent company ByteDance into one of only a handful of truly global Chinese conglomerates. The sources requested anonymity because the deliberations are confidential. The company, that operates TikTok and its sister app Douyin (Tiktok in China), expects to reel in about $28 billion over the year in 2020. It has also fielded acquisition interest in TikTok from other companies and investment firms, the sources said. That's well above rivals like US-based Snap Inc (it's $3 billion more than WeWork's 'peak' paper valuation), and a staggering 50x TikTok's projected 2020 revenue of $1 billion. Sometimes, if an asset is cheap enough, the synergies don't matter.
About 70% of the equity capital ByteDance has raised from outside investors has come from the United States, according to one of the sources.Copyright © 2020 Living Media India Limited. But simply bringing in TikTok and letting it do its thing isn't overly complicated. Snapchat, which has been in the market for way longer than TikTok, has been valued at $33 billion, which is a 15x multiplier of its revenue. Our mission is to capture and present the world's creativity, knowledge, and precious life moments, directly from the mobile phone. But ByteDance's valuation expectations for TikTok of more than US$50 billion, and its insistence on retaining a minority stake in the app complicated deal talks, another source said. The investors’ bid values TikTok at 50 times its projected 2020 revenue of about $1 billion, according to the sources.