Musical.ly, the lip-synching app popular with teens and young people, has been sold to Chinese dominant news app Toutiao, TechCrunch reports, citing people familiar with the matter.
Beijing ByteDance Technology Co., the company behind China’s top news aggregator service Jinri Toutiao, will pay between US$800 million and US$1 billion to buy Musical.ly, which claims 60 million users most of whom are based in the U.S.
Musical.ly, founded in Shanghai by Louis Yang and Alex Zhu in 2014, exploded in popularity among American teens in 2016 and has since expanded beyond its flagship app for creating and sharing personal music videos.
The lip-synching app latched onto the tween demographic and quickly developed cult fanfare. From music videos to live to stream, the platform built a full-fledged social network comprised of four apps, with some users becoming stars.
Users — or musers as they are known for the app — create video selfies with a musical soundtrack and share them with friends. The most popular musers have tens of millions of fans on the app and share revenue from brand partnerships with Musical.ly.
Musical.ly investors include GGV Capital, Greylock Partners and Susquehanna International Group’s China arm.
Three years after launch, Musical.ly was valued at US$500 million when it raised its most recent round of funding in 2016.
In 2016, it rolled out a live-streaming app called Live.ly. The startup struck deals with media firms including Viacom Inc. and Comcast Corp.’s NBCUniversal to make original shows.
Jinri Toutiao — or Today’s Headlines — aggregates news and videos from hundreds of media outlets and has become one of the world’s largest news services in the span of five years, which is well known for its extensive use of artificial intelligence to help build a tailored newsfeed for its user base.
ByteDance’s Toutiao app uses AI to analyse readers’ habits and send them customised content.
Started by Zhang Yiming, it claims 120 million monthly users, and is on track to pull in about US$2.5 billion in revenue this year, largely from advertising, according to Bloomberg.
The company’s investors include Sequoia Capital China and Russian billionaire Yuri Milner, who made his name with early bets on Facebook Inc. and Twitter Inc.
According to Bloomberg, the acquisition represents the biggest venture abroad thus far for a Chinese startup valued at US$20 billion, a person familiar with the matter said, on par with Elon Musk’s SpaceX.
The company’s overseas efforts are now spearheaded by TopBuzz, an app similar to its core offering in China, and Flipagram, a social video app based in Los Angeles, acquired in February. It added to the push this week by acquiring aggregation platform News Republic from Cheetah Mobile Inc., which is also an investor in Musical.ly, for US$86.6 million.
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