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Seeing is believing: TikTok is being valued at $ 50 billion

The popular TikTok app is experiencing its sweetest moment. Its popularity has not grown further since the pandemic began, and investors seem interested in catching it.

As reported by Reuters, some investors in ByteDance, which owns the company, are interested in buying TikTok and value the app at $ 50 billion. Possible stakeholders include Sequoia and the Atlantic Group.

The $ 50 billion valuation represents 50 times the projected $ 1 billion revenue for TikTok in 2020.

For reference, the market capitalization of Snap, the company behind Snapchat, is $ 34 billion, which is 15 times the estimated income for 2020.

This means that investors see growth potential on TikTok much faster than they see on Snapchat. In fact, the projected $ 1 billion in revenue is expected to rise to $ 6 billion in 2021.

ByteDance wants to sell TikTok so that US lawmakers cannot ban it. Earlier this month, US Secretary of State Mike Pompeo said the US government was studying the possibility of banning the app because of its ownership by a Chinese company.

The United States seems to believe that all Chinese technology-related companies, with a few exceptions, spy on behalf of the Chinese Communist government. For example, Huawei hardly has access to US suppliers.

The United States government has raised concerns about sending data to Beijing for many teens and other TikTok users.

Any decision on the sale of TikTok will have to be approved by ByteDance founder and CEO Yiming Zhang, and it may take more than $ 50 billion to rip this ByteDance gem off.

ByteDance, which owns several applications, including the Chinese version of TikTok called Douyin, aims to generate revenue of 200 billion yuan ($ 28 billion) this year. If an agreement is not reached, ByteDance will explore the possibility of selling TikTok’s US operations.

TikTok CEO Kevin Mayer left Disney to join the company in May. This was a deliberate move to make TikTok look more American.

In a blog post published today, Mayer wrote: “With our success comes responsibility and accountability. The entire industry has come under scrutiny, and with good reason. However, we have received even more scrutiny due to the company’s Chinese origins. We accept this and we accept the challenge of giving peace of mind through greater transparency and responsibility. We believe it is essential to show users, advertisers, creators, and regulators that we are responsible and committed members of the American community that follows the laws of the United States. ”

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