Beijing Bytedance Technology Co, the company behind giant Chinese media startup Jinri Toutiao, has acquired teen social video app Musical.ly for around $800 million, Bloomberg reported siting people familiar with the deal.
According to commentators, the acquisition represents the biggest venture abroad thus far for a Chinese startup valued at $20 billion that had already spawned one of the world's largest news services. Bytedance outbid rivals including Kuaishou, the viral video streaming service.
The deal was announced yesterday by Bytedance without disclosing the price tag. The startup would gain a huge US presence, with the addition of Musical.ly's 100 million-strong contingent of lip-synching video performers to Toutiao's own 120 million readers and viewers. Musical.ly which was founded in Shanghai by Louis Yang and Alex Zhu in 2014, rapidly gained popularity among US teens in 2016 and since then has expanded beyond its flagship app for creating and sharing personal music videos.
It rolled out a live-streaming app called Live.ly in 2016 and signed deals with media firms including Viacom Inc and Comcast Corp's NBC Universal to make original shows. Bloomberg has reported it is also looking to make interactive content for a younger audience.
According to news reports, the deal's value has been estimated between $800 million and $1 billion.
After its launch in 2014, Music.ly has drawn over 100 million users, as also cover stories and deals with major labels, which see the platform as a promotional venue par excellence.
Half of US teens and pre-teens are said to use the app, with 64 per cent of its user base falling between the ages of 13 and 24. "It was organic growth - word-of-mouth," Musical.ly's North American president Alex Hofmann told Billboard last year, when the app was adding 13 million users a month.