Business

TikTok revenues hit $16bn in US where it faces ban

Owner ByteDance is on track to overtake Facebook owner Meta as the world’s largest social media company by sales

TikTok supporters watch a feed of a US vote on its future use outside the Capitol in Washington. Photograph: The New York Times
TikTok supporters watch a feed of a US vote on its future use outside the Capitol in Washington. Photograph: The New York Times
Fri Mar 15 2024 - 11:33

TikTok has hit $16bn (€14.7 billion) in sales in the US, where the viral video app that has hooked Gen Z users is at risk of being banned.

Three people with knowledge of its finances said the app, owned by Beijing-based ByteDance, achieved record revenues in the US in 2023. The $16bn they identified highlights the scale of the group’s operations in the country as Congress seeks to force a sale of the platform to an American buyer.

ByteDance as a whole is on track to overtake Facebook owner Meta as the world’s largest social media company by sales. Five people with knowledge of the matter said ByteDance racked up $120bn in revenues in 2023, up about 40 per cent from a year earlier. The increase was driven by TikTok’s exploding growth, though the company brings in the majority of its revenues from China.

Meta reported $135bn in revenues last year, up 16 per cent from 2022.

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Privately held ByteDance does not disclose its financial data. The company declined to comment on the financial figures.

The data came as TikTok’s future in the US was plunged into doubt this week after the US House of Representatives approved a bill to force TikTok to be sold to a non-Chinese company within six months or be banned from US app stores.

The legislation would still require approval by the Senate and President Joe Biden’s signature.

As potential acquirers circled, former Treasury secretary Steven Mnuchin said on Thursday he was putting together a consortium to make a bid for the platform, although he did not provide financing details.

Any deal faces a steep price tag — applying a similar trailing revenue multiple to Meta could value TikTok US at up to $150bn — and the need for Beijing’s sign-off.

Though TikTok remains unprofitable because of its heavy investment in global expansion, ByteDance as a whole recorded $28bn in net profit for 2023, the people with knowledge of its finances said.

Most of the group’s business comes from China, where ByteDance runs TikTok sister app Douyin and a growing in-app ecommerce business.

Losing the US market could have broader consequences for TikTok globally, with the eventual withdrawal of American influencers and celebrities curbing the app’s appeal.

China has said it “firmly opposes” any forced sale of TikTok, and in 2020 rolled out new export controls designed to give Beijing the power to sign off on any sale or divestiture. Foreign ministry spokesperson Wang Wenbin said on Thursday that the US had shown a “robber’s logic” towards the app.

TikTok chief Shou Zi Chew also told the app’s users that, if passed, the legislation “will lead to a ban of TikTok in the United States”. The company has organised users to bombard their local US congressional representatives with phone calls protesting against the bill.

Geopolitical tensions and dim prospects for an initial public offering have weighed on ByteDance. Blocks of the company’s shares were trading on the secondary market at just over a $200bn valuation last year, investors said. In December, the company bought back up to $5bn worth of shares at a $268bn valuation, the people said.

The company’s major backers include billionaire Jeff Yass’s Susquehanna International Group, Sequoia Capital and its Chinese split-off HongShan as well as Yuri Milner’s DST Global and SoftBank. – Copyright The Financial Times

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