Tiger Global Fund invests in ByteDance

Tiger Global Management has established a shareholding in ByteDance, the parent company of short video application TikTok, and has joined the ranks of other global investors such as SoftBank Group and Sequoia Capital, hoping to seize the opportunity of the short video boom.

Tiger Global Fund discussed this holding in a letter to investors this week, saying the company has bought ByteDance shares "at a lower market price based on future free cash flow" in the past 21 months. Tiger Global Fund did not disclose the size of the investment.

Two years ago, when ByteDance completed the $3 billion financing led by SoftBank, investors valued ByteDance at $ 75 billion, making it the world's second-largest valuation after Alibaba's financial affiliate Ant Financial  The second highest startup.

People familiar with the matter said that Tiger Global Fund started to buy ByteDance stock at a valuation of about $ 75 billion at the time, and then increased its holdings through the secondary market.  In the recent past, ByteDance's stock exchange price in the secondary market has a corresponding valuation between $ 90 billion and $ 100 billion.

This investment in shares has never been reported before, showing the support of well-known technology investors for ByteDance.  Previously, ByteDance's TikTok was under scrutiny in the United States.

According to Tiger Global Fund, ByteDance's share of China's online advertising market is expected to increase from about 4% in 2017 to 19% this year.

A report released by market research firm eMarketer shows that China's digital advertising spending will reach $81 billion this year.

Tiger Global Fund said that as the new crown pneumonia pandemic stirs up capital markets and corporate spending, "overall" they have seen a negative net revision of the investment companies' 2020 revenue expectations.

"As before, we have been encouraging the management team to make a rigorous choice about which company to invest in and how to invest. It is expected that future financing will become more difficult." Tiger Global Fund said in the letter.

The Financial Times previously reported that ByteDance Discovery went public in Hong Kong as soon as the first quarter of this year, but was denied by ByteDance at the time.