How to Invest in ByteDance, the Company That Owns TikTok

ByteDance is the Chinese company that owns TikTok, the 5th most popular social media platform in the world.

It took just 9 months for TikTok to reach 100 million users, an unprecedented rate of growth. TikTok is currently one of just 7 social media apps with more than 1 billion monthly active users.

The others are:

• Facebook, WhatsApp, Instagram, and Messenger, owned by Meta (META), a $1.45 trillion company.
• YouTube, owned by Alphabet (GOOG, GOOGL), valued at $1.99 trillion.
• WeChat, owned by Tencent Holdings (TCEHY), a Chinese technology company worth $525.97 billion.

This is an incredible list to be a part of. What's more, an early investment in any of the above platforms would have generated massive returns.

While you couldn't have invested in Meta, Google, or Tencent before their IPOs, there is a way to invest in ByteDance before it goes public.

Here's how to invest in TikTok-parent ByteDance before its IPO.

Can you buy ByteDance stock?

ByteDance is a private company. There is no ByteDance or TikTok symbol and you cannot buy shares of it in your typical brokerage account.

Although the company had plans to IPO on either the NYSE or Nasdaq exchanges in 2021, this move was blocked by Chinese regulators.

Since then, ByteDance management has paused all conversations of an IPO.

Given the company's revenue — $120 billion in 2023 — and interest from private equity firms, I don't expect ByteDance to go public until the business environment in China becomes friendlier and the company is allowed to list on a U.S. exchange.

This could be years away. Fortunately, you don't need to wait for it to go public to be able to invest in ByteDance.

How to invest in ByteDance now

How you can invest in ByteDance depends on whether you're an accredited investor or a retail investor.

Are you an accredited or retail investor?

You qualify as an accredited investor if you meet one of the following criteria:

• You have an annual income of $200,000 individually or $300,000 jointly
• Your net worth exceeds $1,000,000, excluding your primary residence

If you're an accredited investor, you can invest directly in ByteDance (more info below). If you don't qualify as an accredited investor, skip to the second section, which is for retail investors.

How to buy ByteDance stock as an accredited investor

Hiive is a secondary marketplace platform where accredited investors can buy shares of private, VC-backed companies.

There are thousands of private companies available for investment on Hiive, including ByteDance:

There are 3 listings of ByteDance stock available on Hiive right now. Shares are trading at $145.97.

Each listing on Hiive is made by a different seller who sets their own asking price and quantity of shares available. Sellers may be current or former employees, venture capitalists, or angel investors.

Buyers can accept the asking prices as listed or place bids and negotiate directly with sellers.

After registering, you can see the complete order book for every company on the platform. That includes all bids and asks, as well as the price of every recently completed order.

Hit the button below to see the order book for ByteDance:

Register for Hiive

How to invest in ByteDance as a retail investor

While you may not be able to directly invest in TikTok/ByteDance, you can still gain exposure, albeit in a roundabout way.

TikTok is 100% owned and controlled by ByteDance, a private Chinese technology company. ByteDance, however, has a number of outside investors, two of which are public companies.

Invest in Kohlberg Kravis Roberts (KKR)

Kohlberg Kravis Roberts (KKR) is a global investment firm headquartered in New York.

KKR participated in ByteDance's Series E funding round in October 2018. In total, 12 investors invested $3 billion at a valuation of $72 billion. Then, in December 2020, KKR participated in another round that raised $2 billion at a $178 billion valuation.

If we assume KKR invested $250 million at $72 billion in 2018 and $500 million at $178 billion in 2020, its stake has grown to around $1.5 billion based on the current valuation, double its total investment of $750 million.

KKR is a $114.7 billion company, so this $1.5 billion stake in ByteDance represents 1.3% of its total business. If you're considering buying KKR to own ByteDance, you should make sure you like the other 98.1% of the company as well.

Invest in SoftBank Group (SFTBY)

SoftBank Group (SFTBY) is a Japanese technology and telecom conglomerate best known for its investment arm which focuses on disruptive technology. Its list of previous investments includes Alibaba (BABA), Nvidia (NVDA), Uber (UBER), Slack, and more.

SoftBank participated in the same two funding rounds as KKR but sold a slice of its holding at a valuation of $220 billion in March 2023.

If we assume it still holds a $1.1 billion stake, ByteDance makes up 1.25% of its market capitalization ($87.8 billion).

Similar to KKR, you could invest in SoftBank to gain some exposure to ByteDance, but you should also do your due diligence on the other 98.75% of its portfolio.

Who owns TikTok stock?

TikTok is owned 100% by ByteDance, a privately held Chinese technology company.

In addition to TikTok, ByteDance owns a number of other social media and entertainment apps and platforms including:

• Douyin (this is the Chinese version of TikTok, which ranks #11 on the list of social media platforms based on worldwide monthly active users)
• Lark
• Toutiao
• CapCut
• Nuverse
• Xigua Video
  

As of November 2021, ByteDance was partially owned by global investors (60%), employees (20%), and co-founders Zhang Yiming and Liang Rubo (20%).

Its list of global investors includes Kohlberg Kravis Roberts, SoftBank Group, Sequoia Capital, General Atlantic, and Hillhouse Capital Group.

Why are countries banning TikTok?

Governments around the world are considering banning TikTok because of the risks of its Chinese ownership.

For example, it has been completely banned in India, and was recently also banned in Nepal.

Regulators in the West have expressed concern that ByteDance may put sensitive user information into the hands of the Chinese government. They also worry that the algorithms in the app may be tweaked to influence public opinion in a way that is favorable to adversarial nations.

These fears have led the U.S. to prohibit the TikTok app from being on any federal government devices. Additionally, at the state level, 34 out of 50 states have banned their employees from using the app on government-issued cell phones.

In 2020, the Trump Administration threatened to ban TikTok in the U.S., though nothing came to fruition.

In March 2023, The FBI and DOJ launched an investigation into TikTok and asked TikTok CEO Shou Zi Chew to appear before the House Energy and Commerce Committee.

In an attempt to alleviate concern, TikTok proposed Project Texas, which would move all U.S. data into a third-party cloud that only a team of U.S. residents could access.

This would create more transparency and security, while still allowing the app to function in the U.S. Currently, all TikTok user data is stored in Singapore and Virginia.

A similar initiative, called Project Clover, was proposed to store European data in Ireland and Norway. TikTok has also been banned from government devices in many European countries.

Given these geopolitical concerns and the possibility of losing access to the U.S. and other markets, it's no surprise ByteDance's valuation has fallen from around $400 billion in 2021 to just under $270 billion today (more on that below).

How to buy the ByteDance IPO

ByteDance, China's largest startup, was rumored to have been near an IPO on the NYSE or Nasdaq back in 2021 before Chinese regulators stalled its progress.

Since then, its IPO plans have been on ice and management has made no indication of when it will go public.

If/when ByteDance goes public, you'll be able to look up its stock symbol and buy it in your brokerage account. If you don't have a brokerage account, we recommend Public.

On Public, you can Invest in stocks, ETFs, Treasuries, and cryptocurrencies, all on one of the most well-designed investing platforms.

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ByteDance valuation chart

To date, ByteDance has raised $7.44 billion over 13 rounds.

ByteDance's valuation peaked around $400 billion in 2021 when rumors of an upcoming IPO were circulating. The listing was quashed by Chinese regulators.

The company has offered buyback programs twice per year since 2017, primarily as a way to provide liquidity for investors and employees. Most recently, ByteDance repurchased $5 billion of shares at a valuation of $268 billion in December 2023.

Including its share repurchases, here's a look at its valuation history:

How much is TikTok worth?

Remember, TikTok is just one of ByteDance's subsidiaries, all of which contribute to its $268 billion valuation.

TikTok generated $16 billion in revenue in 2023, or 13% of ByteDance's total revenue.

However, given TikTok's growth, number of users, and global reach, I estimate TikTok accounts for ~40% of ByteDance's total valuation. This would imply TikTok is worth around $100-110 billion.