TikTok’s Net Worth: How Much Is TikTok Worth Right Now?
TikTok is the latest in a series of red-hot apps primarily aimed at teenagers and millennials. TikTok describes itself as the “leading destination for short-form mobile video,” with a mission to “inspire creativity and bring joy.” Based in China, the app was founded by Zhang Yiming, who remains something of a mystery, not giving many interviews.
Unlike its relatively unknown and secretive billionaire founder, TikTok is already well known on the global stage. The company’s parent ByteDance continues to maintain offices from Los Angeles and London to Beijing, Warsaw, Singapore, Tokyo, Dubai, Ho Chi Minh City and Bordeaux, to name just a few. Read on to learn more about Zhang’s invention, how it’s used and whether or not it may be a good investment going forward.
|TikTok Company Snapshot|
TikTok Net Worth: $50 Billion
As a private company, it can be hard to get a handle on exactly how much TikTok is worth. However, recent estimates place the value of TikTok’s parent company, ByteDance, at $180 billion. This is based on the company’s most recent attempts to raise $2 billion. This more than doubles the company’s most recent round of fundraising. TikTok itself has been valued at $50 billion by investors willing to bid that much to break off the company from its parent, ByteDance.
Founder: Zhang Yiming Net Worth
Zhang Yiming founded TikTok in 2012. He has become an unqualified success in the business world. The 36-year old former software engineer is now worth over $27.7 billion, making him the 9th-wealthiest person in China, according to Forbes’ China Rich List.
What Is TikTok’s Primary Product and Source of Revenue?
TikTok is an app that allows users to create and share short videos. It comes with an extraordinarily wide range of features that users can employ, from music clips to famous TV show moments to other TikTok videos.
If that overall description of TikTok sounds vaguely familiar, it’s because it’s somewhat reminiscent of the app Vine, which was all the rage in 2013. Due at least in part to the popularity of Vine, video as a method of expression — and generating revenue — exploded in the mid-2010s, popularized still further with the explosive growth of Snapchat, Instagram (owned by Facebook) and YouTube.
How Exactly Does TikTok Work?
TikTok allows users to film their own videos of up to 15 seconds. A database of sound bytes, songs or effects can enhance videos at a user’s creative whim. Typically, videos involve lip-synching or acting out comedy sketches, the only limitation being one’s imagination.
ByteDance, the parent company of TikTok, reportedly generated $17.2 billion in revenue in 2019 alone. About 2/3 of this amount was from domestic ads on the Chinese version of TikTok, dubbed Douyin. Additional revenue came in the form of live streaming, games and ecommerce.
Current Top Shareholders
The Chinese arm of Sequoia Capital counts itself as one of the early investors in TikTok via parent company ByteDance. Additional investors in TikTok parent ByteDance include the following, according to CrunchBase:
TikTok’s Top Shareholders
- CMB Wing Lung Bank
- Morgan Stanley
- Goldman Sachs
- Bank of China
- K3 Investors
- Primavera Capital Group
- Kohlberk Kravis Roberts
- Tiger Global Management
- GGV Capital
How Does the Future Look for TikTok?
The company has been perfectly positioned to benefit from the global quarantine created by the coronavirus pandemic. In 2020’s first quarter alone, the app was downloaded more than 315 million times. TikTok claimed 689 million active monthly users as of October 2020, according to DataReportal. That amounts to more active monthly users than either Twitter or Snapchat, which is a staggering statistic.
One roadblock for TikTok has been the U.S. government’s efforts to ban the app in America due to security concerns. A deal was struck for Oracle and Walmart to take over the U.S. operations of TikTok, but that deal is not yet complete. If that deal were to fall through, TikTok would have to make other arrangements to continue to operate in the U.S.
TikTok still has a long way to go before it competes with the $2 trillion valuation of companies like Apple. However, the bottom line is that user penetration and in-app revenue are both showing strong, consistent gains, pointing the way to a bright near-term future for TikTok.
Should I Invest in TikTok?
Consider this before investing: TikTok is not a publicly traded company. Unlike so many of its “unicorn” brethren that have commanded multimillion-dollar valuations and then had a splashy IPO, you won’t find TikTok traded on say, the New York Stock Exchange. Since TikTok remains private, you’d have to find a way to convince management to accept your investment, which isn’t likely for most.
However, there could be good news around the corner. ByteDance, the Chinese company that owns TikTok, is indeed eyeing the public markets for a possible IPO for TikTok Global. According to the latest market rumors, ByteDance is considering listing those shares in the United States sometime in 2021.
If this comes to pass, you’d want to determine if investing in TikTok would even make sense for you as an individual investor.
Consider these before investing:
- Reputation: Unlike a company like Disney or Walmart, TikTok is far from a “blue chip stock.”
- Private Company: TikTok isn’t subject to the same disclosures as a public company, meaning you won’t have access to quarterly earnings reports and other financial disclosures.
- High Risk/High Reward: Combined with the high valuation and the fate of similar companies that have gone before (e.g., Vine), TikTok solidly resides in the “high-risk/high-reward” camp.
- Security: Possible security concerns raised by the U.S. government fears that information on millions of Americans could be passed to China’s Communist Party.
The bottom line is that any investment in TikTok at this time would have to be considered very speculative.
If you’re still interested in investing in TikTok, you might want to strongly consider enlisting the help of a fiduciary financial advisor, such as a Registered Investment Adviser or a Certified Financial Planner.
These types of professionals, particularly those from one of GOBankingRates’ Best Brokers, can not only help analyze your own investment objectives and risk tolerance but may also have better access to information about what an investment in TikTok would entail.
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- TikTok. "About TikTok."
- Money.com. 2019. "Who Owns TikTok and How Does It Make Money?"
- Reuters. 2020. "Exclusive: Bytedance Investors Value TikTok at $50 Billion."
- Forbes. "China Rich List."
- The New York Times. 2019. "How TikTok Is Rewriting the World."
- TechCrunch. 2020. "ByteDance Valuation Under Huge Pressure as Tiktok Sale Nears."
- CNN. 2020. "Tiktok Exec Says She 'Misspoke' In Hearing."