Bytedance described the deal as a “merger” and offered no details of the transaction. Financial news agency Bloomberg reported it as being priced at about $800 million, while the Wall Street Journal put the price at as much as $1 billion. Those figures compare with a reported $20 billion valuation for Bytedance.
“Musical.ly will continue to operate as an independent platform, integrating Bytedance’s global leading [artificial intelligence] technology and leveraging its reach in China and key markets across Asia to enhance Musical.ly’s offering to users, creators, and partners,” the companies said.
Musical.ly was founded in 2014, initially based in Shanghai, by Alex Zhu and Yang Luyu and now claims 120 million users. It began as a video-sharing service and has become a platform for lip-syncing. In 2016, it added a live-streaming component, Live.ly. It has struck deals with Viacom, NBCUniversal and Hearst’s Seventeen magazine to produce original content for younger audiences.
“Musical.ly’s vision is to make entertainment more personal, participatory and interactive, by enabling anyone to be a content creator,” said Zhu, co-CEO of Musical.ly. “We see AI as a critical factor in augmenting human creativity. Bytedance’s leading AI technologies and top-notch AI developers can empower us to innovate faster and roll out new user offerings unlike anything users have experienced before.”
Zhu added that Musical.ly has recently also been focused on expanding into Asian markets, and that the deal “will allow us to access Bytedance’s massive user base in China, Japan and Korea, and around Asia. This will enable us to provide a completely unique experience to our content creators, influencers, celebrities, and media partners on the platform.”
Bytedance has similar U.S.-Chinese roots. Founded in 2012, and now with backing from Silicon Valley investors that include Sequoia Capital and Digital Sky Technology, Bytedance has scored strongly as a news aggregator.
The company’s flagship product, Toutiao, is the largest AI-powered content platform in China, with more than 120 million daily active users, spending an average of 74 minutes on the platform. Bytedance’s AI technology has global application and the company offers a range of products across global markets, including Flipagram, Topbuzz and Tik Tok. It has operations in China, New York and Los Angeles.
Bytedance has revenues of about $2.5 billion, largely from advertising, and is reported to be be one of the world’s largest “unicorns,” start-up ventures worth $1 billion or more.
Earlier this week, Bytedance announced a strategic cooperation deal with NYSE-listed Cheetah Mobile. As part of that agreement, Bytedance is to pay $87 million for Cheetah Mobile’s news aggregation service, News Republic.
Late last year, Bytedance signed a licensing deal with Studio71, a multichannel network owned by Germany’s giant media group ProSiebenSat.1. Studio71’s content will be subtitled in Chinese and carried on Bytedance’s Top Buzz platform.