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.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.