Spending $800m on social-music app Musical.ly only to shut it down months later in a merger with similar app TikTok? Anyone questioning Chinese firm Bytedance’s strategy may be in for a surprise at the news that it’s now ‘the world’s most valuable startup’ according to TechCrunch, with a valuation of $75bn that even exceeds Uber ($72bn, since you ask).
The Bytedance figure comes from reports of its latest funding round, which offers another startling number. Bloomberg reported that the company has raised $3bn in a round led by Japanese firm SoftBank Group, as well as investment firms KKR and General Atlantic. The report suggested that the primary use for this cash is international: Bytedance wants to take its hugely-successful Chinese-apps business properly global.
TikTok, with its 500 million monthly active users, sits alongside news app Toutiao and shortform-video sharing app Douyin in the top tier of Bytedance’s porfolio, with evidence that the Musical.ly acquisition has helped TikTok’s popularity outside China, judging by its climb up the app-store charts. As Bloomberg pointed out, Bytedance is also unusual in having not taken any funding so far from Chinese tech giants Tencent or Alibaba, as many startups there do.
The sight of a $3bn funding round will only enhance music rightsholders’ desire to quiz Bytedance on its strategy for licensing music and dealing with any unlicensed copyrighted content on its services. The prospect of competition from Facebook’s new TikTok-style app, reportedly called Lasso, is also on the horizon – although as we suggested last week when that news broke, the real threat might be if and when Facebook puts even more social-music features into Instagram, building on its user-generated content licences with labels, publishers and collecting societies.