Company / Analytics

Analytics, 18 June 2021

ByteDance revenue rises as IPO speculation grows

TikTok owner ByteDance saw its revenue for 2020 more than double, totaling $34.3 billion, up 111% year-on-year. Gross profit rose 93% to $19 billion. The Chinese internet company has managed to find success internationally with TikTok, despite a rocky year that saw it dubbed a national security threat by the former Trump. Speculation over a potential ByteDance IPO has been growing, with the company said to target a listing of its Chinese assets that could raise several billion dollars.

ByteDance Revenue

In 2020, ByteDance generated revenue totaling $34.3 billion, up 111% year-on-year while gross profit rose 93% to $19 billion.

ByteDance had 1.9 billion monthly active users by the end of 2020 across all of its platforms — which include its widely popular short video app TikTok, the Chinese version Douyin, and news aggregation app Toutiao, among others, according to the Wall Street Journal.

The company’s rapid growth underscores the excitement around ByteDance, a private company, and why its valuation has reportedly been pegged north of $100 billion. ByteDance’s 2020 operating loss was $2.1 billion versus a $684 million operating profit the year before. The loss was mainly due to the cost of share-based compensation for shareholders.

A rocky year for ByteDance

Despite a rocky year, the Chinese internet company has managed to find success internationally with TikTok, the short video app popular for dancing and lip-syncing. Advertising is a key part of ByteDance’s revenue on its platforms, but it has started pushing into new areas such as gaming and is pitting itself against some of China’s other tech giants like Tencent.

ByteDance was dubbed a national security threat by former President Donald Trump’s administration last August and ordered to divest its TikTok business in the U.S. But the deal to sell TikTok has been shelved indefinitely.

In China, ByteDance has been caught up in a broader regulatory crackdown on the country’s technology sector. In April, Chinese regulators called on 13 online platforms, including ByteDance, to adhere to tighter regulations in their financial divisions. It came as part of a wider push to rein in the country’s technology giants. The authorities said the aim was to prevent monopolistic behavior and the “disorderly expansion of capital”.

Douyin, the Chinese version of TikTok, along with 104 other apps, was called out by China’s Cyberspace Administration of China for the illegal collection of personal data and asked to rectify the issues.

Management changes

The company will also undergo a key management change this year. Zhang Yiming, the co-founder of ByteDance, will step down from his role as CEO by the end of the year and move into a key strategic role. Another co-founder, Liang Rubo, who is currently head of human resources, will take over as CEO.

Earlier this year the company has hired former Xiaomi executive Shou Zi Chew to be its new chief financial officer, signaling it could be gearing up for an initial public offering.

IPO Speculation grows

Speculation over a potential ByteDance IPO has been growing, with the company said to target a listing of its Chinese assets that could raise several billion dollars, Bloomberg reported.

Indeed, many people think ByteDance Ltd could become the hottest initial public offering (IPO) of the decade. It is easy to see why these people want a ByteDance IPO. The closest thing to a ByteDance IPO is the announcement that TikTok Global, a subsidiary of ByteDance, will be publicly traded. So far, in 2021, this has not happened due to the change in US political leadership. What we do know is that ByteDance does not want an IPO as it wants to maintain complete control of TikTok.

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