Tiger Global acquires stake in Bytedance through secondary transactions

Tiger Global Management has made an investment in Bytedance. The New York-based investment group revealed this in a letter to investors this week.

While the investment firm did not reveal details regarding valuation and the amount of the investment, Tiger acquired stakes at a significant low valuation through secondary transactions in the past 21 months.

The letter quoted by the FT report said Tiger Global 'purchased shares over the past 21 months at a low multiple of future free cash flow'.

Tiger started buying Bytedance at about half the value post-Softbank $3 billion round two years ago. Known for its popular short video-sharing app TikTok, Bytedance was valued at $75 billion in 2018.

According to analysts, low multiple of future free cash flow means the company is undervalued and share is cheap. Based on secondary markets estimation, Bytedance recently was valued anywhere between $90-100 billion, added the report.

Entrackr queries to Tiger Global and Bytedance seeking details in this regard remained unanswered. We will update the post as and when they do.

According to the Tiger Global, Bytedance is expected to command 19% of China online advertising market in 2020, from 4% in 2017.

Besides China, ByteDance has emerged as the world’s most valuable startup on the explosive popularity of its short video entertainment app TikTok. The company had last raised $3 billion of primary investment from SoftBank Group and others at a valuation of $75 billion.

However, the app has been a subject to criticism by several governments for spreading misinformation. The Chinese firm has now hired a team to monitor and advise on content moderation and public policy in several countries including India.

Bytedance has three products in the local portfolio (TikTok, Vigo and Helo) that collectively countS 250 million PLUS users in India. It also started monetising through advertising in India.

Entrackr had exclusively reported about Bytedance ecosystem surpassing Rs 20 crore quarter revenue in the period ending December 2019. Bytedance competes against Facebook and Google in the online advertising space in India.