ByteDance has many apps in its portfolio, one of which you will have heard of for certain – TikTok. TikTok is responsible for making mini dance routines on social media the norm. So, it’s no surprise that parent company ByteDance and its revenue are doing exceptionally well.
ByteDance was founded in 2012 by Chinese entrepreneur Zhang Yiming. Over the years, it has seen the popularity of its many apps grow, along with its revenue. In late 2020 after a fundraising round, the firm was valued at $180 billion.
By the end of 2020, ByteDance had 1.9 billion monthly active users across all its platforms collectively. The Beijing-based firm’s portfolio includes the exceptionally popular video-sharing app TikTok, its Chinese equivalent, Douyin, and a news app called Jinri Toutiao. Although ByteDance’s 1.9 billion users aren’t broken down by app, the figure rivals that of Alphabet Inc.’s Youtube, which has more than 2 billion users logging into its site.
TikTok is ByteDance’s most popular app. It is widely viewed as China’s most successful mobile internet export. In the US, TikTok has been downloaded more than 240 million times.
According to reports, senior management at the firm told its employees in a company-wide meeting that ByteDance’s 2020 revenue had climbed by 111% year-on-year. ByteDance’s 2020 revenue totalled $34.3 billion, with its gross profit rising 93% to $19 billion.
Although the company has come out on top, it told staff that it incurred a $2.1 billion operating loss between January to December 2020. According to a person familiar with the matter, this was partially due to ByteDance incurring higher expenses from share-based compensation to workers.
Its 2020 net loss totalled $45 billion primarily due to an accounting adjustment that saw the firm increase the fair value of its convertible redeemable preferred shares. Start-ups that have raised funds externally usually have to take these non-cash charges as their valuations rise – considering they align results with the International Financial Reporting Standards.
A way in which ByteDance generates revenue is through advertising. For example, the income from TikTok primarily comes from advertising as advertisers increasingly move away from traditional platforms. Instead, they make use of more modern internet formats and target customers who spend much more time online.
Last year, TikTok was singled out by former US President Donald Trump’s administration as a national security threat. As a result, Trump was looking to ban the app. However, President Biden revoked the ban earlier this month but signed an executive order forcing Chinese apps to be stricter on data protection.
ByteDance has also encountered trouble in Beijing after the authorities decided to clamp down on its technology sector. The firm was called on by authorities this year for infractions that spanned inappropriate content and improper data use.
According to reports, ByteDance’s next move might be a listing in Hong Kong or New York. However, the firm hasn’t planned out a timeline for an initial public offering just yet.
Kuaishou Technology might have spurred ByteDance’s decision for a future listing. It is one of the company’s smaller domestic rivals, which also operates a video-streaming app. Kuaishou Technology listed in Hong Kong in February 2021 after raising $5.4 billion.
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