- Tram Ho
TikTok is a short video application is storming the world today, owned by Chinese company ByteDance. TikTok’s pricing has never been made public, but recently some investors wanted to buy TikTok to turn this Chinese app into a U.S. app.
And TikTok’s valuation is set at $ 50 billion, an unbelievable valuation. By comparison, the parent company of the Snapchat app was once very popular, Snap .Inc has a market value of about $ 34 billion.
The valuation of up to $ 50 billion is based on the formula, taking the estimated revenue in 2020 to be $ 1 billion multiplied by the factor of 50. The value of Snap is now at 15 times the expected revenue in 2020.
This shows that, investors appreciate TikTok and the growth of this application. Forecasting revenue of 1 billion USD in 2020, will increase to 6 billion USD in 2021.
BytDance wants to sell TikTok to investors in the US, so that the US government and many other countries do not ban this application anymore. Earlier this month, US Secretary of State Mike Pompeo said he was considering banning TikTok because it was a Chinese application. The US seems to believe that all Chinese applications could be a national security threat.
While ByteDance is a private company and has not yet IPO, one of its shareholders sold a small stake, based on a valuation of up to $ 140 billion. The company owns TikTok and a Chinese version called Douyin, whose goal in 2020 is to generate sales of 200 billion yuan (28 billion USD).
An internal source revealed that ByteDance’s board of directors discussed TikTok’s valuation, and offered it even higher than $ 50 billion. It is not clear whether any investor will be willing to buy TikTok at this valuation?
However, if TikTok cannot be sold, ByteDance also has a backup plan. That is separating TikTok’s operations from the parent company and moving to the US. TikTok CEO Kevin Mayer acknowledged the recent problems with the app’s Chinese origin.
Source : Genk