Have you ever asked yourself how much is TikTok worth today? If you want to take a look at the valuation of TikTok, then read our article to the end.
Your head is in the sand if you have never heard of TikTok for a couple of years. Tiktok is doing what other major social media platforms like Instagram are doing, and honestly speaking, this is just the beginning of good things to come in the future. The platform is well known for one of its unique features, two of the leading social media sharing applications for short video content. It involves all the dance video contents of all generations to entertain their audience.
When it comes to interviews about the founder, Tiktok was developed by a Chinese man; Zhang Yiming and is a relatively private individual. Therefore, there is not much information about the person who is the founder of this great application. However, how much is Tiktok worth today? Well, let us take a closer look now.
How Much Is TikTok Worth?
To begin with, Tiktok, as a social media platform, is a private firm. Thus, it makes it hard to know much about its worth today. But the good news is that it is easy to estimate the net worth value based on some metrics. In 2020, TikTok was valued at $50 billion.
But still, experts in the field claim that the valuation is higher than the current valuation in 2022. They estimate the valuation to be sitting around $75 billion. Therefore, this claim approximates TikTok to fall between $50 billion and $75 billion. TikTok's net worth in 2022 is estimated to be $75 billion.
During its inception in 2012, Tiktok was initially known as Musically. This indicates that Instagram and Facebook were at their peak while TikTok was still plodding along slowly to gather some attention online.
However, today TikTok has exploded its popularity. With this in mind, we expect this platform to grow and even go beyond in the future. Its future is bright when you look at its development speed, which has taken over social media platforms by storm. The parent company of TikTok is ByteDance, and it is estimated to have a network of $425 billion.
What Is TikTok's Business Model?
Tiktok generates revenue through various means, including advertisement, e-commerce offerings, and premium purchases. TikTok offers various ads aimed at making money. Besides ads, they also have in-app purchases that consist of app coins and affiliate programs. The business model covers different revenue streams, making you deeply understand its monetization strategy. Let us take a look into each aspect:-
This is among the best avenue to generate revenue on TikTok due to the ample and trending ease space. Tiktok is also implementing e-commerce features to the platform, and they have been doing since its inception. They even tested their first e-commerce link in 2019 via clips. And today, they have developed the platform where they have launched Livestream shopping and integration of Shopify, which displays brands' ads in live streaming.
According to the report by Bloomberg, they are working with merchants marketing in the UK and selling products within TikTok. When TikTok acts as an affiliate in such a commercial agreement to partner with the merchants in the UK, it will take a certain percentage of the total sales amount.
This also applies to other major social media platforms. There is reduced friction of users redirected somewhere else when TikTok allows them to purchase products within the application. This likely boosts the sales and conversion rate that is impacted negatively due to redirection.
The primary source of revenue for any social media platform is advertising. And Tiktok ads are the primary revenue generator for TikTok. There is different ads TikTok offer to its users. These include Brand Takeover advertisements. As the name suggests, these ads take over the whole screen when a user online opens the TikTok application. Most brand takeover ads create mass brand awareness while driving sales. The ads identify the target audience online and introduce a product to them.
Secondly, Branded effect TikTok ads. This ad consists of custom stickers, lenses, and augmented reality filters. Mostly the users have the capability toad their videos intending to promote to the audience. therefore, as one way to promote and generate revenue, Tiktok enables such live effects for a maximum of 10 days. Thus, the target audience has enough time to interact with the products advertised online through TikTok branded effect.
The other ads include In-feed ads, which involve short videos that users access through the FYP section on Tiktok, and they are primarily personalized. They also have top view ads similar to brand takeover ads; however, they do not cover the whole screen but show up at least for 3 seconds.
And lastly, on ads, they have branded hashtag ads- where the user creates video content related to the products to be promoted and then posts with the relevant hashtag to create awareness. That is all about TikTok ads.
This is also a good source of income for Tiktok. While TikTok earns revenue, it also generates revenue for other content creators. But for you to make money, you must meet the minimum requirements covered in the previous article. That is at least 1000 followers aged 18 and above; meeting the above conditions, you qualify for the virtual gifts when you go live.
Users that like content can send gifts where a gift is worth a particular amount of coin. The user buys the gifts using real money through the application and then sends them to the content creator as gifts. The coins are cheap, from as low s $1 for 100 points, but this rate is subject to changes and is different based on the country. For instance, a panda gift costs 5 coins while Drama Queen costs 5000 coins.
The content creators get such gifts in different forms as diamonds. Here a diamond is 5 coins. TikTok takes 50% before adding the coins to your account. However, a content creator on TikTok must have a minimum of $100 to withdraw from their TikTok account, but again, you cannot exceed a withdrawal of $1000 per day.
As stated earlier, the main shareholder of TikTok is the ByteDance investor, which consists of many companies, including SIG, Softbank, Coatue, KKR, General Atlantic, and sequoia capital.
Therefore, ByteDance is the parent company of TikTok, which also runs other multiple applications. There are many shareholders of TikTok who have invested in this profitable platform. To mention a few, some of these shareholders are Morgan Stanely, Tiger Global management, and bank of china.
How About the Future of TikTok?
The popularity of TikTok came at the right time during the pandemic, which was an added advantage. And during the inception of Covid-19 in the first quarter of 2020, the application recorded a download of over 300 million. This application, as we speak, has more active users than Snapchat and Twitter. However, the American government is getting in the way of the success of TikTok.
But why? well, the government of the USA has tried banning TikTok from the states due to security concerns. It is only that the Walmart and oracle deals have not gone through yet, but they are planning to take over the operation. If the plan goes through, TikTok will have to venture into a different avenue to enter the market in American states.
Before achieving the profit number for a case like an apple, TikTok has a long way to go. The net worth is increasing, and it seems like its future is bright when you look at the increasing download and active users. But the bad news is that, due to the government regulatory crackdown. Regardless of this, revenue increases and shows a solid and consistent gain.
Is TikTok Worth to Invest?
Before investing in TikTok, remember that this is a private traded firm. Therefore, you will never find TikTok on things like the stock-exchange market. Thus, you must be capable enough to convince the TikTok management board to offer you a chance to invest with the platform.
However, no one guarantees this. But when ByteDance goes public anytime, there will likely be good news. There are things you need to consider before investing in any company. The reputation of which TikTok is much far away from Blue chip stock.
Also, look at the status of the company is public or private. This is because private does not present to members the quarterly earning reports as well as related financial disclosure. Security is also essential. For instance, the US government raised its security concerns and is likely to ban Tiktok. And lastly, consider the combined high rewards and risks where TikTok solidly resides in this camp like the previous Vine company.
Regardless of the tough calls of TikTok for interested investors, there are more users. Therefore, this platform likely is the prime as we speak to invest and do wonders investing with.
Investment in the TikTok platform is seen as speculative at the moment. Therefore, first, seek a financial advisory when you want to invest in TikTok.
Meanwhile, TikTok is taking over social media platforms by storm, and they are constantly recording increasing revenue generation. While a few limiting factors exist, the increased usage, download, and active users make it worth investing in TikTok and expect worders at the end of the day. This is the prime time to invest regardless of the security concerns.