ByteDance has invested a sum of $170 million to boost the growth of the e-book reading platform Zhangyue. Indeed, it’s a huge capital investment to make on a single IT product having a particular domain of operation. Going further in this article, we will unravel the details of this deal between ByteDance and Zhangyue. However, there might be people reading this article who are not much familiar with either of the two names involved in the deal. Therefore, let us first make ourselves go through a brief introduction to ByteDance and Zhangyue. as per zhangyue 170m series bytedanceliaotechcrunch
About ByteDance and the Its Applications
ByteDance is a Chinese tech giant responsible for the design, development, release, continuous operation, and maintenance of several popular mobile apps, including TikTok and Douyin. Most of you might be aware of TikTok. It is a widely used mobile application across the globe. Moreover, the app recently attracted a lot of controversies that significantly boosted its popularity. TikTok is a typical social media app that allows users to create and share short videos set to music and other audio.
Douyin is the Chinese version of the same application that is available for users in China only. These apps use highly-advanced machine learning algorithms to predict the interest of the user and present them with the content of their taste.
The algorithms make these predictions based on a detailed analysis of the interactions done by the user with the application. Furthermore, TikTok and Douyin use the pattern for suggesting other accounts to follow and engage with. The apps also offer beautification features to the users such as filters, special effects, and other tools to create and edit their videos.
After having known all this, let us now move on to have a look at the e-book reader that ByteDance has pumped so much money into. Also, we will try to decode the motive of this investment.
The motive for ByteDance’s Investment in Zhangyue
It is glaringly obvious that the majority of the revenue that ByteDance generates comes from short videos. The same thing gives the company (start-up) international recognition. The Chinese company, ByteDance wants to expand its business into different domains. as per zhangyue 170m series bytedanceliaotechcrunch
The motive behind this expansion is to fuel the growth of the start-up. ByteDance is following the trend set by other tech giants like Meta, Google, and Microsoft. Enterprise software and online learning are the domains ByteDance is looking forward to covering for now.
This is probably the reason why it chose to shake hands with one of China’s largest e-book readers and publishers, Zhangyue.
Zhangyue is a brand/model of e-book reader that is not well-known outside of China. E-book readers are simple electronic devices that are design specifically to mimic the look of paper pages on a screen and allow you to read electronic or digital books.
These devices often have a tablet-like build, but they are less expensive. E-book readers come with features such as built-in lighting, adjustable text size and font, and the ability to store and organize a large number of e-books. Such devices are affordable and more comfortable for reading books, newspapers, and other long-form text. as per zhangyue 170m series bytedanceliaotechcrunch
All these features make e-book readers popular. Every day more and more users increasing. This might have encouraged ByteDance to invest such a huge amount as a budding technology and a rising company.
Highlights of the Investment
Wednesday, 4 November 2020 was the day when Zhangyue announced that a ByteDance wholly-owned subsidiary has shown clear intentions of acquiring about 11% of its shares for 1.1 billion yuan, or $170 million. At that time, Zhangyue, a China-listed online literature company, was holding a market cap of 12 billion yuan.
The official app operated by the company was hosting 170 million users who used to read novels, magazines, and anime and listen to audiobooks every month during H1. Its contemporary app and immediate rival, China Literature by Tencent spinoff claimed to host 217 million monthly users during the same period.
The online reading market in China is booming, and all over the world as well. According to market insight provider iResearch, most users spent more than 60 minutes on their e-reading apps in 2019. Seeing that, you can say that ByteDance made a well-calculated decision to put a huge sum of money into a reading application. Furthermore, in 2020, this sector is estimate to generate 20.6 billion yuan in revenue. This amount includes subscription and licensing fees to use the application.
This particular deal will cement a close alliance between Zhangyue and China’s leading digital entertainment titan. According to the agreement, ByteDance is entitle to assign one board member to Zhangyue. Also, it has the power to license the publisher’s intellectual property. Moreover, ByteDance will assist Zhangyue in ad buying, monetization, and other technologies.
Before You Go!
ByteDance has become the new favorite of brands and advertisers. This likeability and popularity are powered by the success of Douyin, TikTok, and newsreader Toutiao. All these apps collectively host users in numbers as high as in the hundreds of millions. This partnership between ByteDance and Zhangyue will incur 470 million yuan worth of transactions between them. So, to consider everything being said, it is a deal that would make millions for both parties.