BEIJING– TikTok owner ByteDance has disbanded its investment department, a company spokesperson told CNBC on Wednesday.
Following an assessment at the beginning of the year, ByteDance decided to “strengthen the focus of the business, reduce investments with low connection (to the main business) and disperse employees from the strategic investment department to various lines of business,” the spokesperson said in a Chinese-language statement translated by CNBC.
The news comes as ByteDance is undergoing restructuring since its founder Zhang Yiming stepped down as chairman in the fall. The company has created six business units to focus on different areas from gaming to enterprise software.
ByteDance, which is not publicly traded, is the world’s largest start-up valued at $140 billion, according to CB Insights.
Investments and acquisitions have been a key part of Chinese tech giants’ growth over the years. Companies like Alibaba and Tencent have snapped up smaller players at home and abroad.
ByteDance has aimed to replicate that model, using buyouts and investments to push into new business areas. Last year, the Beijing-headquartered start-up acquired major mobile gaming studio Moonton and took its first steps into the world of virtual reality by purchasing Pico.
On Wednesday, nine government departments, including the increasingly powerful Cyberspace Administration of China, released “opinions” on the healthy operation of internet platform businesses.
The document included calls for strengthening regulation of these companies’ financial activities.
There are signs that Chinese giants are beginning to divest some of their holdings. In December, Tencent significantly reduced its holding in e-commerce giant JD.com and handed the stake as a special dividend to shareholders. And this month, Tencent sold shares in Singapore-based company SEA.
For a sense of how large Tencent’s investments have grown, an annual report showed the company’s holdings in publicly listed companies in 2020 rose by 785.11 billion yuan ($122.7 billion) — more than the 160 billion yuan in profit reported for the year. That’s not including its subsidiaries.
SOURCE: CNBC
