- This represents a 66% surge from the company's valuation of about $330 billion during last year's employee stock buyback.
- General Atlantic initiated the share sale process in recent weeks, aiming to complete the transaction by March this year, according to Reuters.
Private equity giant General Atlantic is planning to sell part of its stake in ByteDance, valuing the Chinese social media giant at up to $550 billion, Reuters reported on Wednesday, citing people familiar with the matter.
This potential secondary market transaction highlights the strong appetite from capital markets for the company following the brightening outlook for TikTok's US operations.
The latest valuation marks a significant leap in ByteDance's private market pricing. Compared to last year's employee stock buyback valuation of about $330 billion, the latest figure represents a 66% surge; it also reflects a 15% increase from the roughly $480 billion valuation seen in a secondary market transaction last November.
This is also the first major equity transaction since the US government approved the sale of TikTok's US operations in January, eliminating the long-standing geopolitical uncertainty surrounding the company.
General Atlantic initiated the share sale process in recent weeks, aiming to complete the transaction by March this year, according to Reuters.
The firm first invested in ByteDance as early as 2017, when the company was valued at just $20 billion.
The divestment is primarily driven by the fact that some of its private equity funds are nearing the end of their 10- to 12-year lifecycle, requiring capital to be returned to investors.
Currently, Bill Ford, CEO of General Atlantic, remains a member of ByteDance's board of directors.
Underpinning this high valuation are ByteDance's robust financial performance and rapid expansion in the field of artificial intelligence (AI).
The company has surpassed Meta, Facebook's parent company, to become the world's largest social media firm by revenue, with projected annual profits reaching about $48 billion by 2025, Reuters noted.
Beyond its core products TikTok and Toutiao, ByteDance has emerged as China's leader in consumer AI applications by 2025, driven by the success of its chatbot Doubao.
While valuations of unlisted companies often vary significantly in secondary market transactions, such deals are typically seen as a litmus test for gauging investor appetite.
