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ByteDance wants a banking license

Published on July 20, 2020 - 3 mins reading time
Bank watch

Chinese group ByteDance seeks banking license

After Tencent and Alibaba, ByteDance, the company behind the TikTok application, is now knocking on the door of the banking sector. As a sign of its good health, the company announced on April 14 the launch of a recruitment campaign for 10,000 new employees.

Diversified activities and sources of income

Beijing-based giant ByteDance continues to grow despite the periods of confinement faced by many countries around the world. The company has been able to capitalize on its diversified activities, notably through the use of social networks. Indeed, in China, the daily time spent on TikTok, which allows users to post mobile videos in short format, exceeded 7 hours, marking a new record. With over 800 million active users, TikTok was the world's most downloaded application in Q1 2020.

ByteDance didn't bet everything on TikTok: in 2012, the company launched its first site, Toutiao, which has become one of the most popular media aggregators in China. In all, it is behind a dozen applications. Its revenues have been estimated at over 10 billion euros in 2019. Since its creation, ByteDance has raised nearly $4.6 billion, mainly from Japan's SoftBank ($3 billion).

Applying for a banking license in Singapore

According to the Financial Times, the Chinese new technology company is seeking a license to set up a digital bank in Singapore. To secure this, it is counting on the support of the Lee family, one of the founders of OCBC Bank, by forming a partnership with one of its investment companies. In this respect, ByteDance differs from Tencent and Alibaba, which obtained their banking licenses in Hong Kong. To justify its choice, the startup explains that, unlike its two competitors, it has no experience of financial services in the country.

In recent years, more and more tech giants have been entering the financial sector. Recently, Google announced that it was entering the banking sector through a partnership with Citigroup. Apple is now offering a credit card to iPhone owners, developed jointly with Goldman Sachs and MasterCard. Finally, WeChat Pay and AliPay are beginning to win market share outside China.

At the beginning of the year, ByteDance was planning to go public, with a valuation of close to $100 billion. However, the Covid-19 crisis has upset these plans. The company, which has announced the recruitment of around 10,000 people in the coming weeks, intends to capitalize on its growing popularity to establish itself in the banking market. However, it will have to redouble its efforts to stand out from the competition.