Bytedance said to be sounded out by authorities about listing on Shanghai’s new tech board
- Shanghai’s tech board, first unveiled by Chinese president Xi Jinping last November, is designed to compete with other top international listing destinations
Beijing-based Bytedance, operator of global short video hit app TikTok, known as Douyin in mainland China, has been contacted by authorities for a potential listing on the much-anticipated Technology Innovation Board in Shanghai, according to people familiar with the matter.
The seven-year-old start-up started talks with investment banks about its IPO plans last summer. Before the option of listing on the new Shanghai tech board came up, Bytedance was considering either New York or Hong Kong, according to the people, who declined to be identified because the information is private.
However, Bytedance’s plans to go public are not as urgent as they were at the end of last year, said the people. It does not particularly want to draw greater public scrutiny of the huge amount of cash needed to fund its global expansion plans and it is also considering issuing debt in the private market as a source of fresh capital, said the people.
Bytedance declined to comment.
The company’s most recent financing round in October brought the company’s valuation to US$76 billion, according to the people, making it the world’s most valuable unicorn and surpassing ride-hailing giant Uber. Bytedance is competing with the likes of Tencent Holdings to build social media platforms that capture a growing share of China’s mercurial millennials, and its innovative short video app stole a march on rivals.
Besides TikTok, the Beijing-based start-up also operates the popular Chinese news aggregation app Jinri Toutiao, which translates as “Today’s Headlines” and which uses AI algorithms to recommend news articles and videos to users based on their interests and preferences.
Shanghai’s tech board, first unveiled by Chinese president Xi Jinping last November, is designed to compete with other top international listing destinations, including Hong Kong and New York, to attract more Chinese tech-related start-ups by adopting less-stringent regulations.
While the new board is not ready for business yet, Chinese authorities said last month they will soon release the draft of listing rules and have already approached a handful of IPO candidates, without revealing the names of the companies.
However, like its rivals, Bytedance has felt the effects of a crackdown by Beijing on content deemed inappropriate or harmful, and this has meant rising costs for social media operators who have had to police their own content more closely. Last April the news app – which has garnered more than 120 million daily active users – was removed from Chinese app stores for three weeks pending a clean-up, meaning Toutiao was unable to rack up new downloads during this time.
Bytedance has achieved overseas success though, with TikTok beating YouTube, Instagram, Facebook and Snapchat in daily downloads in the US app stores after it was merged with established lip-synching app Musical.ly.
