In a big development amid controversy around Chinese social media giant TikTok, its owner ByteDance is in early-stage talks with Mukesh Ambani's Reliance Industries Ltd to financially back its India business. The popular video-sharing app, along with 58 other apps, was banned in India on June 29 over national security and data privacy concerns.
Both the companies had started discussions in July but the final decision on the deal is yet to be taken, TechCrunch reported, citing people familiar with the developments. Investment in TikTok by India's biggest oil-to-retail conglomerate could not only save its fate in one of its biggest markets but also provide the Mukesh Ambani-led RIL deeper connections with its customers.
Both the companies, however, have not come out with official statements on this so far. Before the ban in June, TikTok India had over 200 million subscribers and the company was valued at $3 billion.
Experts believe the combined power of TikTok and RIL's Jio Platforms -- which has also amassed around 400 million users and has a host of big investors, including Facebook and Google, on board -- can really do wonders for Mukesh Ambani's plan to revive RIL into a technology-driven company.The deal could also address the fears of the Indian government, which banned it after serious objections were raised over the app's alleged links with the Communist government in China, though the company has vehemently denied it.
With the latest investment worth Rs 33,737 crore from Google, Reliance Industries' Jio Platforms has committed a total of Rs 1,52,056 crore in JPL since April.It's other top investors are Vista, General Atlantic, KKR, Mubadala, TPG, L Catterton, Intel Capital, Silver Lake, Qualcomm Ventures and Facebook.
ByteDance that is struggling to soothe the concerns amid anti-China sentiments in India, has assured its 2,000 employees that talks with the Indian government were on and that it had no plans to lay off staff in the country.
Apart from India, TikTok is facing major operational issues in countries like the United States, where President Donald Trump has threatened to ban the app in lines of India unless an American company buys it. In view of this, TikTok is in serious talks with global tech giant Microsoft to buy its assets in North America, Australia and New Zealand. ByteDance executives have valued all of TikTok at more than $50 billion, Reuters reported.
Meanwhile, the RIL stock is today trading 0.2 per cent or Rs 4.25 up at Rs 2,131.35 compared to the previous day close of Rs 2,127.6 on the National Stock Exchange.