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Social video app acquired for up to $1 billion

favorite teen social platform
BI Intelligence

This story was delivered to BI Intelligence "Digital Media Briefing" subscribers. To learn more and subscribe, please click here., a teen-focused lip-syncing app with 60 million monthly active users (MAU), has been acquired by Chinese media company Bytedance, The Wall Street Journal reports. Financial terms weren’t disclosed, though the deal is reportedly worth between $800 million and $1 billion.

Bytedance is well known for its news app Toutiao, which has over 120 million daily active users (DAU) and is China’s largest artificial intelligence (AI)-powered content platform, according to Variety. The Chinese company plans to integrate its AI technology into, which will continue to run as a stand-alone app. The AI integration is may result in new functionality that makes the app more attractive. will likely also benefit from Bytedance’s international reach for its expansion. The app could leverage Bytedance’s clout in China as a content aggregation platform to grow its user base in the region. Additionally, will be able to access Bytedance’s massive user base in Asian markets, including Japan and Korea, according to co-CEO Alex Zhu, per Variety.

This presents a significant growth opportunity for — its growth in the US, where most of its users are based, has likely been stagnant for the past two years, according to Recode. Moreover, expanding overseas could position to capitalize on the growing digital ad spend in Asia-Pacific (APAC). In-app ad spend is set to reach $77 billion in 2021 for the APAC region, roughly tripling in size from $26 billion in 2016, according to App Annie. Boosting ad revenue is likely a priority for, as its ad offerings reportedly haven’t been gaining much traction, according to Digiday

Bytedance’s acquisition is the latest example of a Chinese company looking to leverage a US digital platform’s young user base. Chinese gaming giant Tencent announced Wednesday that it paid $2 billion for a 12% stake in Snap, which boasts a millennial-heavy user base via Snapchat. Tencent intends to develop games for the platform, likely in effort to increase usage among the app’s young user base, and attract more ad spend. 

Chinese companies value platforms with young, engaged user bases because the teen demographic is highly attractive to advertisers — they're early adopters, often determine modern trends, and represent potential long-term customers. Meanwhile, by choosing burgeoning US-based platforms for such investments, they're also gaining a foothold in a lucrative target market.

Robert Elder, research analyst for BI Intelligence, Business Insider's premium research service, has put together a detailed report on social video that:

  • Assesses the evolving social video landscape, with attention to Facebook, YouTube, Snap, and Instagram.
  • Analyzes the relative strengths of each platform from a product, distribution, audience, and monetization perspective.
  • Looks at what’s next for the industry, so that media creators and brands can invest for the future.

