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.
