TikTok: revenue in the United States breaks record – 03/15/2024 – Market

TikTok reached revenue of US$16 billion in the United States, where it is at risk of being banned.

Three sources with knowledge of the app’s finances, owned by China’s ByteDance, achieved record revenues in the US in 2023.

The $16 billion highlights the scale of the group’s operations in the country, as Congress seeks to force the 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 revenue.

Five people with knowledge of the matter said ByteDance had accumulated $120 billion in revenue in 2023, an increase of about 40% from the previous year. The increase was driven by TikTok’s explosive growth, even though the company derives most of its revenue from China.

Meta reported $135 billion in revenue last year, a 16% increase from 2022.

ByteDance is a privately held company and does not disclose its financial data. The company declined to comment on financial numbers.

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

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

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

Any deal faces a high price tag — applying a revenue multiple similar to Meta could value TikTok in the U.S. at as much as $150 billion — and the need for Beijing’s approval.

While TikTok remains unprofitable due to its heavy investment in global expansion, ByteDance as a whole reported $28 billion in net profit for 2023, the people with knowledge of its finances said.

The bulk of the group’s business comes from China, where ByteDance operates TikTok’s sister app Douyin and a growing e-commerce business on the app.

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

China has said it “firmly opposes” any forced sale of TikTok, and in 2020 it implemented new export controls designed to give Beijing the power to approve any sale or divestment. Foreign Ministry spokesman Wang Wenbin said on Thursday that the US had shown a “thieves’ logic” regarding the app.

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What’s Next for TikTok and Its US Users After House Approval to Ban

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

Geopolitical tensions and bleak 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 $200 billion valuation last year, investors said. In December, the company bought back up to $5 billion in shares at a valuation of $268 billion, the people said.

The company’s main backers include billionaire Jeff Yass of Susquehanna International Group, Sequoia Capital and its Chinese division HongShan, as well as Yuri Milner’s DST Global and SoftBank.

Reporting by Ryan McMorrow in Beijing, Eleanor Olcott in Hong Kong, Ivan Levingston in London, Tabby Kinder in San Francisco and James Fontanella-Khan in New York