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INVESTMENT: ByteDance Is Planning an IPO
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ByteDance Is Planning an IPO
By Morgan Brady

BT 201809 Investment 01北京字节跳动科技有限公司计划上市

北京字节跳动科技有限公司是中国内容提供巨头,是最早把人工智能技术大规模应用于信息分发的公司之一。公司计划明年上市,上市地点尚未确定。融资阶段估值为 200 亿美金。公司主要产品有今日头条和抖音。两者都是手机客户端应用,通过广告盈利。今日头条是新闻阅读应用,借助人工智能技术提供独特的浏览体验。该应用广泛集成国内外不同渠道信息,目前非中国用户已经超过 1.2 亿。为提供更好的内容,作为对官方管理机构的回应,该应用将其审查岗位增至 10000 个,同意创建用户黑名单,并且使用更加严格的新闻筛选技术。抖音是一个短视品制作发布平台,主要用户多为 30 岁以下年轻人。短视频适应了现代人更加明确的时间观念以及更短的注意力,此外,抖音还邀请社交媒体明星参与线上活动以提高知名度、提升流量。自发布以来的一年半时间内,该应用已经拥有 1.6 亿用户。广泛的用户基础是公司的巨大资产,有利于发布丰富多样的娱乐产品,同时借力人工智能技术,大量依赖大数据的创新产品得以迅速推广。种种有利因素叠加,公司在得以达到更高的估值。

ByteDance is a Chinese social-media giant that is as being the Facebook of China. The company provides people with content platforms that help them enjoy information powered by AI technology. ByteDance aims to become the company of choice in media and entertainment and has reached a valuation of $20 billion through funding rounds. It is currently regarded as being one of the fastest growing startups in China.

Two Main Apps Offered By ByteDance

ByteDance offers many products, but its most prominent offerings are Tautiao and Douyin. They are both mobile applications which provide revenue for the company through advertisement.

BT 201809 Investment 03Tautiao

Tautiao is a news reading app which gives people a unique experience in browsing their topics of interest and is AI powered. The app gathers news from many Chinese (or non-Chinese, depending on the audience) media sources and presents them to users in one feed.

The app’s user base is large as it has more than 120 million users outside of China alone. ByteDance is working on making the app global as it has acquired news reader republic from Cheetah mobile and is using English language in its news reader app for audience from abroad.

In China, the app must now abide by the rules of Internet censorship. And to meet the government’s wishes of providing better quality content, the company has responded by increasing its team of censors from six thousand to ten thousand, and has agreed to create a blacklist of banned users, and also to screen content in a better way by developing better technology.

BT 201809 Investment 04Douyin

The second app ByteDance has is Douyin, which is a very popular app that helps people make short video content featuring them dancing, singing, or even applying makeup. Overseas, this app is also known as Tic Tok. The short videos then go to users’ feeds based on their preferences with the help of AI technology. This app meets the demand of the younger generation, where they can create professional and amateur content tailored to the songs of their choice. It also provides novel and high-quality entertainment to viewers.

The app looks to capture moments of life by providing video editing tools and filters. The videos are popular because they are short, which is convenient for people who have become more time-conscious and have shorter attention spans.

The app invites social media stars to participate in contests hosted by the company online. These contests usually feature social media stars challenging one another or asking followers to broadcast clips to certain themes. This helped in boosting the app’s popularity and helped it to set viral trends.

Videos (or the most popular ones) are then posted in personalized feeds powered by AI. And the app works like YouTube, as content makers make money from selling advertisement views. With more views, content makers can make large sums of money, which is a good incentive to keep the videos coming. Attractive and higher quality videos also help the app to stand firmly against the competition by attracting more and more audience.

The app has received the appreciation of more than 160 million users in less than a year and a half from its release. Most of the audience is young, under 30 years of age, and they spend around 12 hours on an average each month on the app. Douyin has also been the most downloaded non-games free app worldwide in the first quarter of 2018.

BT 201809 Investment 02A Booming Market

The market for short videos in China is generally booming, and Tencent, ByteDance’s main competitor, has been feeling the pinch of ByteDance’s advances. Kuaishou, Miaopai, Douyin and Xigua Video, are some of the other players which are all trying to grab attention on their video sharing apps. For the time being, Bytedance remains in the lead.

Globalization and IPO Plans

ByteDance’s CEO, Zhang Yiming, has the goal of globalization in mind, and the company is acquiring other firms to achieve that goal. For example, ByteDance had bought Flipagram earlier in February 2017, and had also bought Musical.ly for $1 billion earlier, but it had to shut it down afterwards. The aim is to go beyond the local market and have more than half of the users from abroad, according to the CEO.

To continue its impressive growth, the company is aiming to launch an IPO by next year and go public. This comes in the aftermath of a decline in the appetite of private equity and venture capital investors. Other key players in the technology sector, like Didi Chuxing, are also aiming to launch an IPO. The location of the IPOs is still not clear, but if it takes place on Chinese exchanges, it will certainly make the Chinese equity markets more competitive globally and render them more attractive to investors.


ByteDance’s large user base is a big asset. It can be leveraged for introducing a wide variety of entertainment products that would help the company grow fast. This large user base coupled with advanced AI technology can also give rise to innovative products that rely on big data. These factors together can enable the company to get a high valuation should it approach the public markets.

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