A group of investors, including venture capital firms Sequoia and General Atlantic, are considering buying a majority stake, according to The Information and Financial Times. Investors are talking to the US Treasury Department and other regulators about whether a spin-off from TikTok would calm US concerns about the company, according to the FT, which cited unnamed sources.
The reports come as TikTok faces increased scrutiny in Washington. Tensions between the United States and China have increased as the two powers fight for trade, technology, national security and human rights. ByteDance offers a very similar application called Douyin, with the same logo and brand as TikTok, in China. According to the FT, it would retain a minority stake in TikTok under the deal being discussed.
TikTok declined to comment Thursday on a possible sale to US investors, referring to an announcement earlier this month that ByteDance is weighing up changes to its corporate structure. The Wall Street Journal reported at the time that such changes could include establishing a headquarters for video enforcement outside of China, or a new board of directors.
“We are confident in TikTok’s long-term success and will make our plans public when we have something to announce,” a TikTok spokesman said in a statement Thursday.
General Atlantic declined to comment. Sequoia did not respond to a request for comment outside normal business hours.
TikTok has been trying to distance itself from its Beijing-based owner for months.
TikTok contracted Disney (DIS) veteran Kevin Mayer as CEO in May. Its main office is in Los Angeles County and it has offices in London, Paris, Berlin, Dubai, Mumbai, Singapore, Jakarta, Seoul and Tokyo.
But for ByteDance to sell TikTok, the only major social media app created by a Chinese company to gain significant worldwide traction, would be a big move. Cast still It may not be enough to alleviate concerns in Washington, where lawmakers and US officials allege that TikTok poses a threat to national security because Beijing could use it as a spy tool. TikTok has denied those allegations.
Secretary of State Mike Pompeo and other US officials say they are considering banning TikTok. The United States House of Representatives voted to prohibit federal employees from downloading TikTok on government-issued devices. And President Donald Trump’s reelection campaign is currently running Facebook (full board) Ads that hit the app.
The ads state that “TikTok is spying on you” and link to a survey and a record for a Trump campaign mailing list asking if TikTok should be banned in the United States.
Wells Fargo has instructed its employees to remove the app from company devices. And TikTok is also under pressure in other countries.
The company pulled out of Hong Kong earlier this month, after China imposed a controversial national security law on the city. Last month, India banned TikTok along with several other popular Chinese applications, amid mounting tensions with China. The app also faces increased scrutiny in Australia, according to CNN affiliate 9 News Australia.
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