TikTok owner ByteDance Ltd. is working to ensure it complies with data security requirements after meetings with government officials over the issue earlier this year, a person familiar with the matter said.
The Chinese tech giant, whose apps also include TikTok’s Chinese twin Douyin and the news aggregator Toutiao, had kicked off initial preparations for an IPO of its domestic assets, Bloomberg News reported in April. ByteDance’s considerations about going public had been in flux even before Didi Global Inc.’s IPO in New York sparked a regulatory backlash, and the company is approaching any potential IPO cautiously, people familiar with the matter said Monday, asking not to be identified discussing private information.
ByteDance meets regularly with Beijing regulators about a range of issues, including data security, and the March discussions were part of that ongoing process, according to one person. Founder Zhang Yiming did not attend the March meetings, the person said. A ByteDance representative declined to comment.
Companies seeking to raise capital in overseas markets are now facing greater scrutiny, after China on Saturday proposed new laws that will require virtually all firms heading for an IPO outside of China to undergo a cybersecurity review. Didi had gone ahead to list in New York in June, even though Bloomberg News reported regulators asked it as early as three months ago to delay the debut. Authorities have since commenced a cybersecurity probe into the firm and removed its services from Chinese app stores.
The Wall Street Journal earlier reported the March meetings with regulators, adding that ByteDance put on hold indefinitely its intentions to list offshore earlier this year after Chinese officials told the company to address data-security risks. Regulators never called outright for a delay to ByteDance’s possible share offering, but they were concerned about data-security compliance by its apps in the country, according to the report.
The Cyberspace Administration of China and the China Securities Regulatory Commission didn’t respond to the Journal’s requests for comment.
Trading of ByteDance’s shares in private markets have held steady at about $330 billion over the past month, according to a person with direct knowledge, although asking prices for the stock have been higher.
ByteDance had been considering plans to raise at least several billion dollars from a listing of its Chinese assets, Bloomberg reported in April. At that time, it was choosing between Hong Kong and the US as its listing venue. The company in March hired Shou Zi Chew from Xiaomi Corp. as its CFO, fuelling speculation an IPO was imminent.
The company later issued a statement saying it didn’t meet the conditions to go public and currently didn’t have any such plans.
By Zheping Huang and Vinicy Chan