How TikTok's Owner Became
The World's Most Valuable
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How TikTok’s Owner Engineered A Virality & Personalization
Engine To Become The Most Valuable Unicorn In The World
ByteDance, the China-based unicorn
behind the video-sharing app TikTok, was
recently valued at up to $140B. Now, the
company is leveraging its recommendation
algorithms to expand its portfolio in a bid
to join the ranks of Big Tech.
At the end of 2018, Chinese tech startup ByteDance completed
a $3B investment round led by SoftBank at a valuation of about
$75B — catapulting it to be the most valuable startup in the world.
In 2020, investments made in the company reportedly valued it at
up to $140B, cementing its high-flying status.
Those who are unfamiliar with the name ByteDance have most
likely heard of its flagship product, TikTok. As of May 2020, the
viral video app has been downloaded approximately 2B times.
The onset of the global coronavirus pandemic and the associated
lockdowns have further accelerated TikTok’s trajectory. In Q1’20
alone, TikTok accumulated 315M new downloads worldwide —
a record-breaking quarter for an individual app, according to
Sensor Tower.
As of spring 2020, ByteDance operates more than 20 apps in
spaces ranging from news and video to music and mobile gaming.
Some, like TikTok, are international in scope. Others, like the news
aggregator product Toutiao, have so far only been made available
to Chinese users.
How TikTok’s Owner Engineered A Virality & Personalization
Engine To Become The Most Valuable Unicorn In The World
With each new product it launches, ByteDance leverages the same
3 key advantages it has cultivated in its core business areas like
news curation and short-form video:
A young and highly engaged user base. Like Facebook before
it, ByteDance is leveraging an audience of actively engaged
young people to facilitate its growth. In the US, 60% of
TikTok users reportedly fall between the ages of 16 and 24.
Worldwide, two-thirds are under the age of 30.
Products engineered for virality. With TikTok, ByteDance
appears to have tapped into something powerful in the way
that users currently want to engage with content. The top
50 content creators on TikTok have more followers than the
populations of Mexico, Canada, the UK, and Australia combined.
Personalization and recommendation algorithms. One way
to think of ByteDance is not so much as a creator of content
platforms, but as an articial intelligence laboratory that
specializes in developing algorithms that can match users
with content, from video and music to news and e-commerce.
ByteDance is jockeying for a spot alongside global tech leaders
like Google, Facebook, Amazon, as well as their China-based
counterparts Baidu, Tencent, and Alibaba. But a permanent place
in Big Tech is far from guaranteed.
Concerns about ByteDance’s approach to user privacy are
mounting and established tech companies and startups alike are
singling ByteDance out as a threat, launching products to compete
with it directly.
ByteDance will have to prove its viral products are more than a craze.
In this report, we look at ByteDance’s expanding product portfolio,
highlighting how its core advantages play out in each product. We’ll
also examine how the company is expanding its geographic reach,
focusing on its expansion in 3 critical markets: China, India, and the US.
How TikTok’s Owner Engineered A Virality & Personalization
Engine To Become The Most Valuable Unicorn In The World
The rise of ByteDance 6
ByteDance’s products 7
Media and entertainment 9
Mobile gaming
Internet 16
Other 19
Enterprise productivity
Cloud infrastructure
ByteDance’s markets 23
China 24
India 25
The United States 27
What’s next for ByteDance? 28
Table of Contents