China’s Toutiao is buying Musical.ly in a deal worth $800M-$1B

The deal is undisclosed by sources tell TechCrunch that Bytedance, the company behind China’s top news aggregator service Toutiao, will pay between $800 million and $1 billion to buy Musical.ly, which claims 60 million users most of whom are based in the U.S..

Three-year-old Musical.ly was  at $500 million when it raised its most recent round of funding in 2016. The startup said it will continue to run as an independent business within Bytedance, taking advantage of the distribution and tech that its new parent offers.

Bytedance itself has been on a tear over the past two years thanks primarily to Toutiao, which claims 120 million monthly users. The firm is reported to be raising as much as $2 billion in new funding at a valuation of $20 billion, and it has expanded into other types of mobile content through acquisitions such as video app Flipagram.

Toutiao has become well known for its extensive use of artificial intelligence to help build a tailored newsfeed for its userbase, and in an announcement today the companies said that this tech will be used to develop Musical.ly’s reach in terms of users and creators in China, Korea, Japan, and Southeast Asia. These are regions where the company hasn’t really made a mark to date, despite the fact that its founders are Chinese and its head office is in Shanghai, but Bytedance has a growing presence in them.

In that sense, there’s plenty of synergy to the deal — which gives insight into how keen Bytedance is to expand overseas having already found huge success in the Chinese market.

At a time when investors have cooled on social media, Musical.ly stands out as a success story. There’s a commonly held view that it’s almost impossible to stand out amongst a crowded market which includes Facebook, Snapchat and Twitter. In that way, Bytedance is similar since it has emerged to become a super company in China, where Baidu, Alibaba and Tencent have traditionally dominated as the big three.

In Musical.ly’s case, it latched onto the tween demographic and quickly developed cult fanfare. From music videos to live streaming, the platform developed a full-fledged social network, with some users becoming stars.

In the business community, Musical.ly’s success was initially under the radar. When we broke the story of its funding round 18 months ago, the startup name hardly rang a bell for most adults in Silicon Valley. The Shanghai-based company had both local 

The affecting of the weal of men, which is that the Grecians call philanthropia; and the word humanity (as it is used) is a little too light to express it.  Goodness I call the habit, and goodness of nature, the inclination.  This of all virtues, and dignities of the mind, is the greatest; being the character of the Deity: and without it, man is a busy, mischievous5, wretched thing; no better than a kind of vermin. Goodness answers to the theological virtue, charity, and admits no excess, but error.  The desire of power in excess, caused the angels to fall; the desire of knowledge in excess, caused man to fall: but in charity there is no excess; neither can angel, nor man, come in dan ger by it.  The inclination to goodness, is imprinted6 deeply in the nature of man; insomuch, that if it issue not towards men, it willtake unto other living creatures; as it is seen in the Turks, a cruel people, who nevertheless are kind to beasts, and give alms, to dogs and birds; insomuch, as Busbechius reporteth, a Christian boy, in Constantinople, had like to have been stoned, for gagging in a waggishness a long-billed fowl9.Errors indeed in this virtue of goodness, or charity, may be committed.  The Italians have an ungracious proverb, Tanto buon che val niente: so good, that he is good for nothing.  And one of he doctors of Italy, Nicholas Machiavel, had the confidence to put in writing, almost in plain terms, That the Christian faith, had given up good men, in prey to those that are tyrannical and unjust.  Which he spake, because indeed there was never law, or sect11, or opinion, did so much magnify goodness, as the Christian religion doth. Therefore, to avoid the scandal and the danger both, it is good, to take knowledge of the errors of an habit so excellent.  Seek the good of other men, but be not in bondage to their faces or fancies; for  that is but facility, or softness; which taketh an honest mind prisoner.  Neither give thou AEsop's cock a gem, who would be better pleased, and happier, if he had had a barley-corn.  The example of God, teacheth the lesson truly: He sendeth his rain, and maketh his sun to shine, upon the just and unjust; but he doth not rain wealth, nor shine honor and virtues, upon men equally.  Common benefits, are to be communicate with all; but peculiar benefits, with choice.  And beware how in making the portraiture, thou breakest the pattern. For divinity, maketh the love of ourselves the pattern; the love of our neighbors, but the portraiture.Sell all thou hast, and give it to the poor, and follow me: but, sell not all thou hast, except thou come and follow me; that is, except thou have a vocation, wherein thou mayest do as much good,with little means as with great; for otherwise, infeeding the streams, thou driest the fountain. Neither is there only a habit of goodness, directed by right reason; but there is in some men, even in nature, a disposition17 towards it; as on the other side, there is a natural malignity.  For there be, that in their nature do not affect the good of others.