TikTok
Culver City, California, United States
Industry: Social Media
Region: US 🇺🇸
Founded: 2016
Expected Valuation: $160 billion
IPO Date: 2023 (Expected)
TikTok Inc.
Key Company Facts
| Founded | 2016 |
| Headquarters | Culver City, California |
| Sector | Social Media |
| Industry | Technology |
| Founders | Zhang Yiming |
| Number of employees | 8,424 (LinkedIn May 2023) |
| IPO Date | 2023 (Expected) |
| Number of investors | N/A |
| Total funding | $7.4 billion USD |
| Number of account holders | 1.8 billion |
| Valuation estimate | $110 to $180 billion USD |
Company Overview & History
TikTok is a short-form, video-sharing app that allows users to create and share 15-second videos on any topic. The app was launched in 2016 by Chinese tech company ByteDance for markets outside of China. ByteDance had previously launched Douyin, a similar app for the Chinese market, in 2016.
TikTok rapidly gained popularity due to its unique algorithm that recommends content to users based on their viewing habits, and the app’s easy-to-use video creation and editing tools. In September 2022, TikTok boasted millions of active users worldwide and is available in over 150 markets and in 75 languages.
Financial Performance
TikTok has experienced significant financial growth since its inception. The company’s revenue has consistently increased year over year, from $63 million in 2017 to an estimated $9.4 billion in 2022.
The company’s valuation has also seen substantial growth, with ByteDance investors valuing TikTok at about $50 billion in 2020 and an estimated value of between $110 billion and $180 billion in 2023
Revenue
| Year | Revenue (USD) |
|---|---|
| 2017 | $63 million |
| 2018 | $150 million |
| 2019 | $350 million |
| 2020 | $2.64 billion |
| 2021 | $4.70 billion |
| 2022 | $9.40 billion |
Business Model
TikTok’s business model is primarily based on advertising revenue. The platform offers various advertising options, including brand takeovers, in-feed ads, and hashtag challenges, allowing businesses to reach TikTok’s large and engaged user base.
TikTok also generates revenue through in-app purchases, such as digital gifts for live streamers and coins that can be used for various in-app transactions.
Estimated Valuation
| Year | Valuation (USD) |
|---|---|
| 2018 | $7.4 billion |
| 2019 | $17 billion |
| 2020 | $50 billion |
| 2023 | $110-180 billion |
Risk Factors
As with any tech company, TikTok faces several risk factors. These include regulatory challenges, particularly around user data privacy and national security concerns.
The company has faced scrutiny and potential bans in multiple countries, including the United States and India. Additionally, the platform’s reliance on user-generated content and the associated content moderation challenges present potential risks.
Market Opportunity
Despite the risks, TikTok has a significant market opportunity due to its unique position in the social media landscape. The app’s popularity among younger audiences and its unique algorithm that encourages content virality provide significant opportunities for user and revenue growth.
Furthermore, the short-form video market is rapidly expanding, providing additional growth opportunities for the company.
Competitors
- YouTube
- Instagram (Reels)
- Snapchat
- Triller
- Byte
- Likee
- Dubsmash