By Ginny Hendricksen
Updated on: May 11, 2024
Bytedance is a provider of cutting-edge technology, namely online platforms with entertainment value. The company’s mission is to support creativity, content creation, and commerce to enrich users’ lives through their broadcasting, gaming, and streaming offerings. The company’s valuation reached $180 billion in 2020 when Bytedance raised $2 billion from a private equity firm in a funding round.
Bytedance was founded by Zhang Yiming in 2012, and is the parent company of the hit content-sharing platform, TikTok. TikTok is not yet profitable, but it is a popular social media platform for short videos with over 1 billion global users.
The US government has been concerned that Bytedance might share private data from over 150 million US TikTok users with the Chinese government. Bytedance CEO Liang Rubo started Project Texas in March 2023 with the goal of protecting US TikTok users' data.
Bytedance and TikTok, have made news headlines recently. President Biden and the Senate agreed that banning TikTok sales in the US was necessary for national security reasons. Other countries, like India, have already a Bytedance ban in place.
Bytedance has filed a lawsuit opposing the US ban. The company claims that selling TikTok would mean giving up its core algorithm, which it refuses to do. Rather than selling the subsidiary separately in the US, Bytedance would prefer to shut down TikTok in the states. Sources estimate that the US makes up for one-quarter of TikTok’s user base.
Bytedance’s general strategy has been to launch many features quickly to see which features users like the most. Then Bytedance only develops the most popular feature into it an app. Bytedance apps also utilizes artificial intelligence to analyze user behavior data to personalize recommendations to users.
Besides TikTok, the China based tech giant owns subsidiaries Douyin and Toutiao. Douyin is the company’s crown jewel super app raking in the most revenue.
Bytedance stock is not sold on the NYSE or NASDAQ stock exchanges, and there is no ticker symbol assigned to its stock yet. Its stock is not available for purchase through traditional brokerage accounts.
Bytedance will appear in the Notice stock ticker if it has recent private market activity.
Yes. Bytedance has issued 7 classes of preferred stock. Investors usually get a stake in Bytedance by buying preferred shares and employees typically get common stock options or restricted stock units.
Since the company is private, the general public is not permitted to invest in Bytedance tech stock directly. Retail investors looking for exposure to Bytedance can purchase shares of mutual funds that hold Bytedance shares, such as: Kohlberg Kravis Roberts & Co. (KKR) and SoftBank (SFTBY).
Accredited investors can buy Bytedance stock pre-IPO from employees or shareholders through the secondary market. Private market transactions can be complex and often involve company approvals, legal purchase agreements and wires to third parties. Trades can take 30 - 60 days to complete and that's why many investors hire experienced private market brokers to ensure things go smoothly.
Notice members can message expert brokers for free to learn more about buying and selling private stocks.
Because TikTok is owned by Bytedance, its stock is not sold separately. Investing in TikTok would be possible if the parent company were to decide to make TikTok a stand-alone company and list it in the public stock market.
As with all private companies, Bytedance doesn’t have to disclose financial information to the public like publicly traded companies do.
Bytedance earns revenue primarily from advertisements. The company’s revenue has reportedly climbed from $80 billion in 2022 to $120 billion in 2023. Bytedance has successfully raised capital over 7 financing rounds.
Major venture capital firms have invested in Bytedance including: Sequoia Capital, KKR, Tiger Global, General Atlantic, SoftBank, Primavera, and others.
G24, bought $100 million of Bytedance stock in March 2023 from existing investors at $220 billion valuation.
A serious consideration when considering Bytedance’s future revenue is Chinese government regulations. Historically, China has set such restrictions on education and gaming sectors which negatively impacted their private mega technology companies.
Bytedance’s last announced post-money valuation was $180 billion in 2020. The company was valued $75 billion in 2018 which was a massive increase from 2017 when it was valued at $11 billion.
Internal 409a valuations of Bytedance’s set the common stock price per share at $170.81 in April 2024, up from $160 per share in December 2023.
You can track Bytedance private stock price live on the stock price chart above.
In 2021 the company seemed to be headed towards a US public listing when the company hired a CFO in March. Since this is necessary step prior to an IPO, it created a wave of speculation that a Bytedance IPO was imminent. However, Julie Gao, the Bytedance CFO at the time, told employees in August 2022 that they were not planning to launch an IPO.
The company did let some employees exercise and cash out their options in 2022at a stock price of $155 per share. This represented a 20% valuation drop from the employee stock option price offered in 2021.
Privately-held US companies set baseline internal benchmarks which must be met to qualify for an IPO. No information on Bytedance’s benchmarks are known.
No details have been disclosed about the minimum market cap Bytedance needs to reach to go public, or what their initial target share price would be for an IPO. The threshold for minimum gross proceeds from an initial public stock sale is unknown. The company has not filed a form S-1 with the SEC.
The climate of market conditions and political issues make a Bytedance IPO unlikely in the near future.