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Where next for TikTok as total user spending hits $456.7 million

Though ByteDance’s owner has knocked-back any plans for a 2020 IPO, we examine some of the latest statistics from the company’s flagship app: TikTok.

TikTok (ByteDance) valuations: recent developments in focus

Global short-form video app TikTok has risen to prominence in the last couple of years for its sticky product design as well as its explosive user-growth and app install statistics.

The prospect of a ByteDance initial public offering (IPO) – the Chinese tech company behind the TikTok app – has excited many investors over the last year.

Looking at the company’s current valuation, New York based investment fund Tiger Global Management’s recent secondary market investment in ByteDance imply a valuation of between $90 billion to $100 billion, according to a recent report from the Financial Times.

Tiger is said to have purchased these ‘shares at a low multiple of future free cash flow,’ according to that report.

In 2018, ByteDance had an implied valuation of $75 billion, following a $3 billion investment from SoftBank’s legendary Masayoshi Son.

Though there’s no way to know what share price ByteDance (TikTok) may trade at if or when the company publicly lists, this latest investment round gives investors some potential insight into how the company is currently or may be valued.

Moreover, though TikTok remains ByteDance’s most prominent app/ product, it should be noted that ByteDance is also behind a number of other established products and apps across the globe.

These include Toutiao, a popular Chinese content discovery app; BaBe, an Indonesian content creation and news app; Lark a collaboration tool available in Japan and Singapore; Helo, a leading social media platform in India; and Xigua Video, a Chinese-focused video applications app.

IPO rumours swirl as app installs continue to grow

In spite of ByteDance’s extensive portfolio, users seem most drawn to the company’s flagship TikTok app.

Recent data from SensorTower suggests that TikTok’s user-base has continued to grow at a dramatic rate. According to SensorTower, as of 29 April, estimates suggest that TikTok has now surpassed 2 billion downloads world-wide – representing an increase of 500 million in just five months.

On a more granular level, the majority of these app installs came from India, with SensorTower reporting 611 million total downloads, China came a close second at 196.6 million downloads and the US came third, with 165 million total downloads.

The firm noted that these figures do 'not include downloads from third-party Android stores in China or other regions,’ suggesting that third-party downloads were a significant contributor to overall installs.

From a fundamental perspective, and looking at lifetime user spends, on 29 April SensorTower estimated that:

‘Lifetime user spending in TikTok has risen to $456.7 million, more than 2.5 times the $175 million the app had generated when it reached 1.5 billion downloads.’

Broken down by region, SensorTower noted that Chinese user spending accounted for the largest portion of revenue, coming in at $331 million, the US came in second at $86.5 million and the UK third, at $9 million.

Speaking of where TikTok may head next, SensorTower argued that:

'The continuous rise of TikTok gives it an ever-bigger foundation to not only enjoy success for the short-term, but build for the long-term to keep competitors—both existing and emerging—at bay.'

Even with these strong metrics, the outlook around a potential ByteDance IPO remains uncertain. According to the Financial Times, as of late last year, the company’s CEO has denied plans of a 2020 public offering.

ByteDance (TikTok) grey market trading explained

You can trade CFDs with IG's ‘grey market’ ahead of the ByteDance (TikTok) listing, allowing you to speculate on the company’s market cap before it lists. Our grey market price is based on our prediction of ByteDance's market cap at the end of the first trading day.

Specifically, with our grey market, you can:

  • ‘Buy’ if you think the market cap will be higher than the price indicated
  • ‘Sell’ if you think the market cap will be lower than the price indicated

Click here to find out more about IG’s grey market trading now.

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

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