Beijing-based mobile device app Toutiao is leading the way on media aggregation, earning hundreds of millions of dollars in investment within the past decade as it watches its user base explode in popularity — and as a sign of its success, its parent company Bytedance is now seeking a valuation of more than $10 billion.
Zhang Yiming, the founder of Bytedance and Toutiao, said he has always had an interest in computers and information, and that his app was the best way to combine them. He recognizes that while people have an interest in international affairs, they are primarily interested in the more local news that directly affects them. The app works by providing users with tailored, locally focused news, it does this by taking data from users’ social media accounts to better tailor that news to them.
This means that Toutiao, a Chinese language app, can provide a unique service with customized information from a wide variety of media sources including photos, videos, and articles, that help it stand out from the competition.
“It’s meaningless to go through the massive amount of information online. A personalized reading platform saves time for users,” Yiming told CCTV America back in 2014 during an interview about the app.
Users have responded favorably since the app’s launch in 2012, and as of last year, it had at least 350 million unique users in China alone, with at least 35 million of those users active on the app on a daily basis. Toutiao’s revenue comes largely from advertising on the app, which to date has proven to be a successful business model.
Investors also see the benefit of the app and have provided at least $110 million in funding, including a $10 million investment in June 2015 to help further Toutiao’s enviable growth.
The Wall Street Journal reports that the app’s parent company — its full name is Beijing Bytedance Technology Co. — was valued at $500 million on its launch. Now, Yiming is seeking a $10 billion valuation as it looks to further its dominance of the market, a reflection of the intense popularity of Toutiao. That valuation includes a plan to seek at least $1 billion in new investment to help with the company’s immediate growth plans.
The high valuation is also notable because it appears to be at odds with a trend of declining investment in social media apps. Economic and other factors have reduced investors’ interest in funding technology start-ups, but Yiming appears to have found a way to overcome these hurdles and keep investors interested. The proven success of Toutiao is helping to ensure it can receive the funding it needs to continue its growth.
According to the Journal, the extra investment that Yiming is seeking through the new valuation will help to expand the company’s reach in China, but also boost its efforts in other countries. Bytedance is working to promote an English-language news app called TopBuzz and looking to make its mark in Brazil, India, Japan, and the United States. Yiming is now seeing its highly localized news app start to have a real global impact. Certainly, ones to watch.