Home Startups Abu Dhabi’s G42 acquires stake in TikTok owner ByteDance

Abu Dhabi’s G42 acquires stake in TikTok owner ByteDance

by Val Lukhanyu
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Abu Dhabi investment firm Group 42 (G42) which is controlled by Arab Emirates royal Sheikh Tahnoon bin Zayed Al Nahyan  has acquired a $100 million stake in Chinese internet company ByteDance, owner of the social media app TikTok, from existing investors at a valuation of $220 billion.

ByteDance Ltd. was valued at around $220 billion in a recent private-market investment by Abu Dhabi AI firm G42, a significant discount to the $300 billion that TikTok’s owner set during a recent share buyback program.

The Middle Eastern firm may be betting on ByteDance’s longer-term potential, as a rebounding Chinese economy buttresses tech giants emerging from three years of Covid restrictions and endless regulatory crackdowns. 

ByteDance, which gained a foothold in the US by buying TikTok’s predecessor, is one of a handful of Chinese app developers to have hit the big time abroad. That select club includes upstarts like fast-fashion purveyor Shein Group, AliExpress and PDD Holdings Inc.’s bargains app Temu. 

ByteDance’s marquee service drew advertisers keen on hitting a more youthful demographic. And it’s craved out a niche selling goods to millions of social media users via live streams across the world. 

That popularity spooked some in Washington. The White House endorsed a bipartisan bill last week that could grant the president authority to ban or force a sale of TikTok — which could deal a major blow to the Chinese firm’s international ambitions. 

A ByteDance IPO — the company has explored options including Hong Kong and the US — remains a ways off, given global market volatility. In September last year, the Beijing company offered to buy back $3 billion of its own shares at a valuation of about $300 billion, offering a way for existing backers such as Susquehanna International Group and Sequoia Capital to cash in some of their gains.

ByteDance, which is also backed by SoftBank Group Corp. and Temasek Holdings Pte, isn’t in urgent need of cash after TikTok alone generated an estimated $12 billion of revenue in 2022. 

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