ByteDance ends discordant 2020 on a high note

ByteDance is doing just fine. TikTok’s Chinese parent is raising $2 billion in new funds from current investors KKR and Sequoia amid pressure from Washington to sell its viral video unit. The company is also on track to hit a full-year sales target of $30 billion, thanks to its local apps. A booming home market more than makes up for stalled global expansion.

The private equity heavyweights are leading the latest funding round that would value the Beijing-based company at $180 billion, Reuters reports, more than double what ByteDance was worth when it raised capital in October 2018. That suggests President Donald Trump’s chaotic campaign to force a sale of TikTok’s U.S. business has barely fazed founder Zhang Yiming and backers including SoftBank. The White House’s original deadline has lapsed, putting a deal with Oracle and Walmart in limbo. Separate bans have been blocked by federal courts. ByteDance is even fighting back: last month, it filed a petition asking a U.S. appeals court to review Trump’s order.

Even if the next administration under Joe Biden re-ups the attacks, ByteDance’s life without TikTok may not be so bad. Despite the huge distraction to Zhang’s global ambitions, ByteDance will still reach its overall revenue goal for the year of roughly $30 billion, raking in some $27 billion from advertising alone, according to Reuters. The three main apps in China, including Douyin, Toutiau, and Xigua account for around 80% of that revenue.

Alibaba trades at roughly 6.5 times its revenue, suggesting these properties alone are worth more than $140 billion. But there are additional assets that ByteDance owns, including office-collaboration business Lark, and Resso, a music-streaming service. And based on Facebook’s price-to-sales multiple of around 9 times, these three fast-growing Chinese businesses would be worth more than $200 billion.

Plus ByteDance has the opportunity to crack into a big share of a massive advertising pie. eMarketer forecasts digital ad spending in the country will top $120 billion by 2024, up from $75 billion this year. Given the firm’s heft and growth at home, that may be attractive enough for Wall Street to roll out the red carpet for ByteDance, even if Washington shuts its doors. Reuters