TikTok owner ByteDance liquefies its investment component
ByteDance, the owner of TikTok, has separated its investment department, a company representative told CNBC on Wednesday.
At the beginning of the year, after an assessment, the company decided to strengthen the focus of the business. It started to reduce investments with low connection to its major business and spread employees to various lines of business. The spokesperson talked about this matter in a Chinese-language statement translated by CNBC.
The company said that the move boosts the coordination between the business and strategic research.
The news came as the company started restructuring after its founder resigned as chairman. The company has created various business units to focus on multiple areas, from gaming to enterprise software.
According to CB Insights, ByteDance is the world’s largest start-up, valued at $140 billion.
Overview of ByteDance and its decisions
Investments and acquisitions played a crucial role in Chinese tech giants’ growth.
ByteDance planned to copy that model, using investments and buyouts to push into new business zones. In 2021, the start-up (headquartered in Beijing) acquired major mobile gaming studio Moonton. It took its first steps into virtual reality by purchasing Pico.
However, the tightening of regulations changed the situation in China. The dealmaking has become challenging. Several tech giants have failed to report old deals.
On Wednesday, several governmental departments, including the Cyberspace Administration of China, released opinions on the businesses.
This document included requests for strengthening the regulation of these companies’ financial activities.
There are signals that Chinese giant tech companies are beginning to relieve some of their holdings. At the end of 2021, Tencent reduced its holding in JD.com and gave the stake as a special dividend to shareholders. And in January, Tencent sold shares in SEA (A Singapore-based company). An annual report showed that Tencent’s holdings in 2020 rose by 785.12 billion yuan ($122.8 billion).
