In continuation of Bytedance’s efforts to distance TikTok from its Chinese roots, two of the company’s biggest investors — Sequoia and General Atlantic — have reportedly valued TikTok at $50Bn. The news comes in via Reuters, which has spoken to people privy to the proposed deal. The valuation comes amid a new strategy that involves transferring of majority ownership of TikTok to Bytedance’s US investors, to put a ‘US-owned’ on the highly popular yet controversial Chinese social media platform.

Sequoia and General Atlantic, the key investors of TikTok want ByteDance to sell a major portion of the company to them, which will not only take the pressure off of the Beijing based company, but also distance the platform from China, the root of the entire fiasco. Media outlet ‘The Information’ had also reported of a similar deal a while back.

The company has been valued at a gargantuan $50 billion, which is 50 times its projected 2020 revenue of about $1 billion. While tech companies do go at a higher multiple of their revenues, 50x is almost unheard of. Snapchat, which has been in the market for way longer than TikTok, has been valued at $33 billion, which is a 15x multiplier of its revenue. Now, given that the company’s management team hopes to generate $6 billion in revenue for 2021, this is still an outlandish valuation by any stretch of imagination.

It is unclear if ByteDance will accept the offer. The company, that operates TikTok and its sister app Douyin (Tiktok in China), expects to reel in about $28 billion over the year in 2020. Moreover, in a deal that took place earlier this year, the entire company was valued at $140 billion. Thus, it is unclear if even a 50x multiplier will appease founder and CEO Yiming Zhang.

2020 has not been the best year for TikTok, most of which has been TikTok’s own doing. The app has become a centerpiece of government suspicions and subsequent bans, due to alleged proofs of the app’s close connection with the Chinese government and the country’s Communist Party. Because of those reasons and a heightened border tension, India — TikTok’s largest market — banned the app and several other Chinese apps citing privacy and national security issues. Days after that ban, Mike Pompeo, the US Secretary of State said they were ‘looking at’ banning the app as well. The US constantly raises concerns over Chinese apps passing user data to the Communist Party of China.

Now Japan Mulls Ban

To complicate matters further, Japanese national broadcaster NHK reported today, that even Japan is considering a ban on TikTok, along with several other apps developed by Chinese companies. The concerns regarding user privacy and and security, and the threat of Japanese data getting in the hands of Beijing pushed the country to take this step. Thus, a group of lawyers is banding together to restrict the app in Japan, with a plan to submit a proposal to the government as early as September.

Thus, a deal that takes the company away from Chinese control is probably in ByteDance’s best interest. However, in case the plan fails, the company is already planning to make some internal structural changes and might even shift its headquarters from China. It had even announced a $200 Mn ‘creator fund’ which would be given to deserving content creators in the US, both for inspiring content creators to create more content and to earn good will in the country.