You may not be familiar with its name, but ByteDance is very much a part of your daily life. In just a few years, this Chinese app company has become the world's most valuable startup, surpassing Uber.
ByteDance has succeeded in conquering the Chinese market with the news aggregator Jinri Toutiao and the whole world with the star application TikTok.
Today, the company is worth more than $75 billion and intends to continue its ascent.
So how did a company founded by a 29-year-old Chinese man manage to make such a rapid impact? What applications does ByteDance develop? Who are its backers? What does the startup's future hold? Focus on ByteDance, the world's most valuable startup.
What is ByteDance?
ByteDance brings together several applications used in China and around the world. Even if its name remains unknown to the general public, especially in Europe, the startup is a veritable digital giant.
A startup symbolizing China's digital explosion
In recent years, China has opened up to the digital world. With the world's largest population, its market is flourishing. Investors haven't waited long to get their hands on Chinese phones, and are making huge profits in the process.
The creator of ByteDance, Zhang Yiming is a perfect example: in 2012, he launched Jinri Toutiao, a news aggregator that has become ultra-popular in China. In 2016, the entrepreneur created Douyin, better known as TikTok on the Western market. With its short, musical videos, the app managed to conquer the whole world in no time.
ByteDance is the story of a visionary young entrepreneur who managed to make a name for himself in his own country, and then worldwide, in record time. Zhang Yiming is a former Kuxun (travel website) and Microsoft employee. Thanks to his experience, he has been able to understand the importance of artificial intelligence and personalized content, and has turned them into his spearhead.
Jinri Toutiao, China's news star
Cell phone users in China were finding it very difficult to access information. Zhang Yiming decided to remedy this situation by launching the application Jinri Toutiao (literally "the headlines of the day" in Chinese). Thanks to them, over a billion Chinese now have access to personalized information.
This is Jinri Toutiao's strength: using artificial intelligence to offer its users information in line with their interests. The application offers a personalized feed of content recommendations (over 50% of which are in video format).
The app quickly won over the Chinese until it became more widely used than the giant Facebook. In January 2018, its users spent an average of 74 minutes of use per day. Today, Toutiao boasts more than 120 million followersincluding over 10 million abroad.
TikTok, a global success story
Unlike Toutiao, TikTok is present throughout Europe and the rest of the world. Today, it's the most downloaded application in the world, and the one that appeals most to teenagers. The short, karaoke-like format of the videos, the intuitive use and the personalized news feed have made TikTok a hit all over the world.
A worthy successor to Vine (now defunct), TikTok has succeeded in building on the success of Musical.ly and short-form videos. The difference? TikTok uses artificial intelligence to offer its users videos that coincide with their interests. Once again, personalized content is the strength of the application launched by Zhang Yiming.
In 2018, just two years after its creation, TikTok counted more than 150 million daily active usersand 500 million monthly active users. TikTok is the fastest-growing application in the world. A true success story for ByteDance.
A meteoric rise
In just ten years, ByteDance has become a hyper-performing startup and leader in its field. Its two star applications have conquered the world and China, all in record time.
Zhang Yiming, a visionary entrepreneur
Zhang Yiming came up through the ranks at Microsoft. This gave him a solid grounding in new technologies. The enormous potential of the Chinese market caught the entrepreneur's eye, which is why he decided to go all in. As a Chinese citizen himself, he knows all the particularities of his country and quickly understands the challenges of his market.
Investing in China has been a winning bet for Zhang Yiming, as it has established itself as a leader in terms of information distribution. However, the real strength of the applications developed by ByteDance lies in their use of artificial intelligence. Thanks to artificial intelligence, the content offered is personalized and much more appealing to users. No need to go looking for the information that interests you or the videos that make you laugh, they come straight to you.
This ultra-innovative vision has succeeded in supplanting giants like Facebook, which is now increasingly abandoned by young consumers. With its algorithm for targeted content, Toutiao has conquered the whole of China to become the country's leading medium.
International expansion
After confirming his success in China and, to a lesser extent, Asia, Zhang Yiming decided to expand internationally. He launches Douyinwhich became TikTok on the Western market. It was a real success, as confinement and boredom led people to use their cell phones and social networks more and more.
Perfect timing for TikTok, the app that was just being born at the time. The ultra-short video format and intuitive use of the application delight consumers who are more than ever looking to kill time.
Today, TikTok is the most popular application among young people and the second most popular social network in the world, just behind Facebook. Every year, TikTok registers 300 million new downloadsmaking it the most downloaded application in the world. Augusta Free Press estimates that TikTok will have 1.9 billion users worldwide by 2023.
Colossal investments
In 2018, ByteDance organized a fundraising event that saw it receive an investment of $3 billion. As a result, ByteDance surpassed the $75 billion valuation mark, dethroning Uber ($72 billion).
ByteDance has not yet gone public. KKR and Sequoia Capital led a financing round in 2020 that enabled ByteDance to raise raise $2 billion.
It is therefore possible to invest in ByteDance on the stock market, but only through KKR & Co. L.P. and the Japanese bank Softbank. Its shares are currently listed at less than $50.
What next?
ByteDance has a bright future ahead of it. It boasts an audience that spans all social classes, and these days even older people are starting to take an interest in TikTok. What's more, young people, who are the most frequent users, are relatively sensitive to the advertising offered on the platform.
Tensions with the United States eased
At the time of its creation and rise, Donald Trump accused the application of interference from the Chinese government. Since then, the purchase of 20% of the TikTok brand by Walmart and Oracle have eased tensions.
However, political insecurity still forces the unicorn to postpone its IPO for several years. Despite this, ByteDance continues to post ever-increasing sales.
ByteDance: key information
Number of employees to date
By July 2020, the ByteDance startup had nearly 60,000 employees.
Sales figures
ByteDance's sales amounted to almost $58 billion. This represents a jump of 69% on the previous year.
Initial public offering
ByteDance still hasn't gone public. Although the tensions with the United States that prevented the process have eased, political instabilities are still preventing ByteDance from going public.
Business and strategic objectives
With millions of new subscribers every year, whether on TikTok or Toutiao, ByteDance is growing by leaps and bounds. ByteDance's plan is to continue attracting new users, and why not overtake industry giants such as Facebook or Instagram.
Scalability
ByteDance is a reliable company to invest in without taking too many risks. It has seen the biggest growth ever recorded, and new users are becoming ever more numerous. What's more, the targeted advertising system on the group's various applications is generating huge profits.
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