China's Toutiao buys teens social video app Musical.ly in latest expansion

Gladys Abbott
November 11, 2017

Lip-sync app Musical.ly has been scooped up by Beijing ByteDance Technology Co., or simply ByteDance, the Chinese startup behind news site Jinri Toutiao, the company announced on Friday.

Now the Beijing-based company, with a valuation said to be in the neighborhood of $20 billion, is making bigger moves to crack into the world of mobile video, media and entertainment in the USA and beyond.

The Musical.ly app allows users to share 15 second videos of lip syncing popular songs and making amusing faces.

Toutiao's purchase of Flipagram, Musical.ly's primary rival in the self-shot-video-accompanied-by-music market, gives Bytedance dominance in soundtracks to personal videos. The app's cofounders, Alex Zhu and Louis Yang, will join Bytedance and will continue running Musical.ly as an independent platform.

Musical.ly, founded in Shanghai by Louis Yang (楊陸育) and Alex Zhu (朱駿) in 2014, exploded in popularity among U.S. teens previous year and has since expanded beyond its flagship app for creating and sharing personal music videos.

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Bytedance operates a suite of products that provide creators and users with a content experience powered by machine and deep learning algorithms.

Musical.ly's investors include Silicon Valley firms GGV Capital and Greylock Partners.

Jinri Toutiao - or "Today's Headlines" - is one of the few Chinese internet operations to have found success without the backing of one of the country's three biggest industry players: Tencent Holdings Ltd, Baidu Inc and Alibaba Group Holding Ltd.

News Republic, according to Bytedance's Zhang, will give the company "access to high-quality content from thousands of high-profile media partners around the world, making an exciting step forward in our worldwide expansion strategy".

Musical.ly and ByteDance could not be immediately reached for comment. Although financial details were not disclosed, multiple outlets are reporting that Bytedance is paying around $800 million for the buzzy video service. This summer, Reddit raised $200 million in new funding, giving it a valuation of $1.8 billion.

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