TikTok parent company ByteDance generated more than US$17 billion ($25 billion) in revenue in 2019, and US$3 billion ($4.4 billion) in net profit, eclipsing the OG online video platform YouTube.
According to a Bloomberg article, which cites sources “familiar with the matter”, ByteDance’s 2019 revenues were more than double its 2018 takings.
If correct, it means the new video streaming service on the block has overtaken incumbent YouTube, which reportedly raked in US$15.1 billion ($22.2 billion) in ad sales last year.
It hasn’t quite caught up with Instagram, though, which bought in US$20 billion ($29.4 billion) in revenue for parent company Facebook in 2019.
However, these are only stats for 2019, before the COVID-19 lockdowns really took hold. The crisis, and plethora of people obediently staying at home, has caused a spike in activity on TikTok, with more newbies trying their hands at lip syncing and dance challenges.
Already, between TikTok, its Chinese counterpart and a news service, ByteDance draws in an average of 1.5 billion active users each month. One can only imagine what a global pandemic might do to those numbers.
All of this bodes well for ByteDance’s rumoured upcoming IPO, which may or may not come to pass in 2020.
Ke Yan, an analyst from DTZ Research suggested the company could be looking at a valuation of between US$150 billion and US$180 billion ($220 billion to $265 billion), largely due to the global reach of TikTok-mania.
“None of the Chinese tech companies has achieved this level of success in the global market before ByteDance,” Yan told Bloomberg.
However, we may not want to be too hasty here. He also noted the business has a whole lot of debt, and analysts have expressed concern about its lofty valuation before.
On the other hand, if it’s raking in as much as is being reported, it might put off going public for the time being.
“The fact that ByteDance is making profit, if true, and sitting on a $6 billion cash pile means that it is not in a rush at all to come to market to raise capital, and therefore less likely to offer the shares at a more reasonable price for IPO investors,” Yan explained.
Either way, TikTok is never long out of the news cycle. Just last month, Disney’s head of streaming abandoned post to take up the reins as TikTok’s chief executive.
And the story doesn’t stop here. Much of ByteDance’s success has been attributed to the wildly popular mini-vid platform, but, it’s also reportedly gearing up to enter the gaming, search and music sectors.
With billions in the bank, a will-they-won’t-they IPO in the works and new leadership at the helm, who knows where the TikTok story will take us next. Hold onto your hats.