Ahead of its much-awaited Initial Public Offering (IPO), TikTok parent ByteDance is trying to address issues with the Chinese government to ensure it complies with the data security requirements of the country. For this, its officials are meeting with Chinese regulators to ensure a smooth overseas listing process.
The initial process for filing the IPO was initiated in April. Apart from TikTok, ByteDance also owns Douyin, the Chinese version of TikTok, and Toutiao, a news aggregator platform. The Chinese companies that are aiming to raise money in overseas markets are facing regulatory scrutiny in China.
A new law passed just last week in China says that all companies eying an IPO must go through a cyber-security probe, and it must remove its services from Chinese app stores, Bloomberg reported citing sources familiar with the matter.
ByteDance had earlier reportedly dropped its plan to raise capital in the overseas market. It was considering listing in the US or Hong Kong exchange. But, the plan was shelved after it reportedly didn't meet the criteria laid down. Though there was no pressure from regulators, they were concerned about its data-security compliance.
However, it's now mulling listing in the US and wants to ensure it also complies with all the norms in China too. It does not want to repeat the 'mistakes" like Chinese ride-hailing tech giant Didi Chuxing, which despite the Chinese regulators' disapproval went ahead with the IPO in New York. Soon, the company was facing a cyber-security probe in the country and even saw its services removed from the play stores.
As per the new plan, ByteDance aims to raise billions of dollars by listing overseas. Current estimate says the company is valued at $250 billion.
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