verse: Tiktok parent Bytedance exits VerSe at 56% discount in secondary share sale

Bengaluru: China’s ByteDance, which operates short-video platform TikTok, has fully exited VerSe Innovations, parent of local language news aggregator Dailyhunt and short-form video app Josh at a 56% discount, according to latest regulatory filings accessed by ETtech.

ByteDance, which first invested in VerSe Innovation in 2016, has sold its stake to the company’s existing investors– Ontario Teachers Pension Plan (OTPP) and Canada Pension Plan Investment Board (CPPIB), as a part of the secondary transaction, according to latest filings.

The filings showed ByteDance sold more than 1.39 lakh shares to OTPP and over 1.62 lakh shares to CPPIB. The Chinese fiem sold these shares for close to $102 million, per the filings.

According to a back-of-the-envelope calculation, this would have translated to more than $232 million payout for Bytedance at the
last primary fundraise valuation of $5 billion, leading to a 56% discount in the secondary share sale.

Bytedance’s exit from VerSe Innovation comes at a time when
it is also exploring a re-entry to India through a new partnership with the Hiranandani group, ET reported on June 1. Bytedance is looking to strike a new partnership in India and rehire former and new employees as it seeks to re-enter one of the world’s largest internet markets, several people aware of the matter told ET.

Earlier in April, VerSe Innovation had announced that it has signed definitive documents and raised $805 million in a new funding round led by existing investor CPPIB. In an official statement, CPPIB had said that it invested $375 million in VerSe as a part of the latest fundraise in April and another $50 million was invested in January this year, taking the total investment this year to $425 million.

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Prior to the April fundraiser, Dailyhunt parent was valued at around $3 billion after a $450 million funding in August last year and prior to an investment by Google and Microsoft. The company has raised $1.5 billion in the past year, underscoring the capital-intensive nature of the sector.

An email sent to VerSe Innovation did not elicit any response on the matter immediately.

According to VerSe Innovations, Josh has 150 million monthly active users with 49% of them being daily active users, while Dailyhunt serves more than 350 million users every month,

The company had told ETtech it was looking at offering web3.0 experiences across languages on its platform, besides trying social commerce, live commerce and influencer-led commerce.

VerSe Innovation’s rival Mohalla Tech, which owns local language social network ShareChat and short video platform Moj, is said to be closing a $300 million funding from Google, Temasek and other investors. In February, the industry saw a significant consolidation with ShareChat’s Moj and Times Internet’s MX TakaTak merger deal.

Platforms like MX Takatak, Moj, and Josh came into prominence after India banned a slew of Chinese apps including TikTok in 2020. Besides the above-mentioned players, Instagram Reels and YouTube Shorts are among the apps which compete with Josh. Times Internet is part of The Times of India Group which publishes ETtech.

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