The Case for Triller: The TikTok Competitor Approaching Unicorn Status, And Getting Big Breaks
Jul 31 2020
Fresh off of closing a $50 million round that valued the company at $300 million, Triller – headquartered in L.A. and with offices in New York, London and Paris – is now seeking $250 million at a valuation of $1.25 billion, according to executive chairman Bobby Sarnevesht. The short-form, user-generated video sharing app's momentum has picked up lately thanks to increased usage during the pandemic and the troubles of TikTok.
<p>"The numbers look crazy recently," said Anis Uzzaman, chief executive of Pegasus Tech Ventures, which invested several million dollars in the $50 million round. Those numbers include 120 million total downloads and 60 million monthly active users, Sarnevesht told dot.LA. </p><p>Triller's user count is now close to what Musical.ly's (now TikTok) was back <a href="https://techcrunch.com/2017/11/09/chinas-toutiao-is-buying-musical-ly-in-a-deal-worth-800m-1b/" target="_blank">when it was acquired by Chinese conglomerate ByteDance in 2017</a>, and as TikTok comes under more regulatory scrutiny, Uzzaman predicts that Triller will become "the American TikTok." </p><h2>How Could It Get There?</h2>
<img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzUyNjQ0NS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY0NDcxNjYxM30.NIZ9Htq-tt3_k_0nUE4MDIX7AO8H4xbXnQ-dwKpqETY/image.jpg?width=980" id="62bb4" class="rm-shortcode" data-rm-shortcode-id="fed6922503c4c419ea01ad0d33a33de2" data-rm-shortcode-name="rebelmouse-image" />
Triller executive chairman Bobby Sarnevesht.
<p>One clue lies in India. When <a href="https://www.nytimes.com/2020/06/30/technology/india-china-tiktok.html" target="_blank">Narendra Modi banned TikTok and 58 other Chinese apps in June</a> amid escalating military tensions between the two countries, Triller's usage "went through the roof," Sarnevesht said. In early July, Triller <a href="https://www.linkedin.com/feed/update/urn:li:activity:6684933651794411520/" target="_blank">CEO Mike Lu wrote that his company had become the top iOS app in India "without spending a dime."</a></p><p>"We're seeing (Indian) users say they prefer Triller to TikTok, but just didn't know about it," Sarnevesht said.</p><p>To Uzzaman, Triller's ability to handle the surge of Indian users proved the strength of the platform's underlying technology. "I'm sure many other platforms would have choked with the new volume of clients," he said. With the "possibility of the same thing happening in the U.S.," Uzzaman feels confident that Triller would be ready for another upswing.</p>
<img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzIxNjE0My9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYyODU1OTYyNH0.idWD75Hkmhk2hzcEyw8c94cL7UkErfPDAfv6xXRrKUo/image.png?width=1500&coordinates=965%2C347%2C825%2C7&height=2000" id="a1935" class="rm-shortcode" data-rm-shortcode-id="65db52fdfc0610b27e569a3c4bac0ba1" data-rm-shortcode-name="rebelmouse-image" />
Pegasus Tech Ventures chief executive Anis Uzzaman
Anis Uzzaman<p>TikTok, which <a href="https://www.theinformation.com/articles/bytedance-investors-discuss-tiktok-purchase?utm_source=twitter&utm_medium=page" target="_blank">is reportedly the subject of preliminary discussions for a sell-off</a>, has a big head start. According to analytics firm SensorTower, it has been <a href="https://sensortower.com/blog/tiktok-downloads-2-billion" target="_blank">downloaded over 2 billion times</a>. TikTok's global user count is <a href="https://datareportal.com/social-media-users?rq=tiktok" target="_blank">estimated at over 800 million</a>. And <a href="https://www.reuters.com/article/us-bytedance-tiktok-exclusive/exclusive-bytedance-investors-value-tiktok-at-50-billion-in-takeover-bid-sources-idUSKCN24U1M9" target="_blank">a recent Reuters piece pegged its valuation around $50 billion</a>.</p><p>If TikTok is banned in the U.S. that would obviously put Triller in a place to pick up some ground. Four factors stand out that could shift the balance in Triller's favor.</p><h2>Privacy & Security</h2><p>The government isn't the only one concerned about privacy and security concerns, Uzzaman said..</p><p>"The market is getting more concerned about security and privacy," he said. "People are getting more vocal." Having Triller's teams based in "the top democracies in the world...definitely makes a huge difference."</p><p>Sarnevesht emphasized that Triller "treat(s) the face as an object – we don't map the face. Data is secure. We don't track geo-locations on where users are."</p><p>Concerns around whether TikTok shares data with the Chinese government, meanwhile, <a href="https://stratechery.com/2020/the-tiktok-war/" target="_blank">have been well documented</a>.</p>
<p><br/></p><h2><br/></h2><h2>Music First, Social Second
</h2><p>"Our business is music. It's in our DNA," said Sarnevesht. Uzzaman said this confers two key advantages. </p><p>One is Triller's product mix. Uzzaman pointed to Triller's "Step Up Challenge," a music battle where competitors can win prizes, and the TrillerFest virtual music festival, which attracted over 5 million viewers and participants this April. </p><p>"We have a music-centric, music-first app that has amazing creator tools," Sarnevesht said. "Amazing events. Concert series coming out in different locations and different genres. It's a very different destination for content users and producers and watchers." </p><p>That musical foundation has lately sprouted other kinds of content. "We're starting to see a tremendous influx of content…(like) cooking, practical jokes, and gaming," Sarnevesht added. </p><p>Another advantage to being music-first, Uzzaman said, is that musical stars like posting on the app. "Alicia Keys, Cardi B, Marshemello: they're regularly posting music videos in the app – we've never seen that in TikTok," he said. "Regular people can create music videos and have people watch them right next to Eminem…(It makes) people feel like they're celebrities." </p><p>"I think artists appreciate the organicness of Triller," Sarnevesht added. </p><h2>Partnerships
</h2><p>In line with Triller's music origins, it has long-term deals with the big three music labels and numerous music publishers. This enables Triller users to include songs from those rights holders' extensive catalogs without having to worry about copyright issues. </p><p>"What differentiates Triller is we've always had music licenses in place," said Sarnevesht. "It gives artists a platform to have their content in a place where it's not being stolen." </p><p>Conversely, <a href="https://www.msn.com/en-us/music/news/tiktok-and-nmpa-reach-a-global-partnership-agreement-exclusive/ar-BB176fnk" target="_blank">TikTok has mostly operated via short-term deals</a> with labels and publishers. It does, however, have <a href="https://www.musicbusinessworldwide.com/tiktok-inks-new-global-deal-with-believe-one-of-the-worlds-biggest-independent-music-companies/" target="_blank">a long-term deal with Believe, a big independent music company</a>, and it recently forged an agreement with the <a href="https://www.musicbusinessworldwide.com/tiktok-inks-global-multi-year-deal-with-music-publishers/" target="_blank">National Music Publishers' Association</a>. NMPA's President and CEO David Israelite isn't done; he <a href="https://www.instagram.com/p/CDOTK5Vh-DH/" target="_blank">posted a warning earlier this week on his Instagram that Triller should 'watch out,</a>' later elaborating that the company "<a href="https://www.musicbusinessworldwide.com/triller-warned-that-it-must-legitimize-its-business-by-properly-licensing-all-music-on-its-platform/" target="_blank">must legitimize its business by properly licensing all music on its platform.</a>"</p><p>Triller has also partnerships with Spotify and Apple Music. Jack Warning of Pegasus Ventures said these help Triller with user engagement. If a Triller user likes a song on the app, for instance, they can add it to a Spotify or Apple Music playlist. And users can pull songs from Spotify and Apple Music into Triller to make videos. </p><p>But "the biggest partnership that really got our attention," Uzzaman said, "was with Billboard." Alongside charts like the Billboard Hot 100, <a href="https://www.billboard.com/articles/business/chart-beat/9417698/billboard-triller-partner-weekly-top-triller-u-s-global-charts" target="_blank">it has begun publishing weekly charts of top songs from the Triller app</a>.</p><h2>Technology
</h2><p>There is "more technology behind (Triller) than people understand," said Uzzaman, who likened Triller to the earlier days of Google, when it was chasing the heels of Yahoo. He pointed to Triller's AI tools for editing videos, and protocols for helping brands advertise on the platform. </p><p>Among other features, Sarnevesht pointed to new, "game-changing" recommendation algorithms, and highlighted how <a href="https://techstartups.com/2019/10/24/ai-music-platform-triller-raises-new-funding-acquires-uk-based-mashtraxx/" target="_blank">Triller's 2019 acquisition of UK-based MashTraxx</a> came with "13 employees, 11 Ph.D's, all specializing in AI. One of them wrote a thesis on recommendation engines and AI in the short-form video space." </p><p>TikTok has no shortage of technology, which <a href="https://www.theverge.com/2020/7/29/21346390/tiktok-algorithm-moderation-policy-transparency-china" target="_blank">it has recently begun to share more openly</a>. But it is currently <a href="https://www.thewrap.com/triller-sues-rival-tiktok-patent-infringement/" target="_blank">being sued by Triller for patent infringement</a>, and <a href="https://www.musicbusinessworldwide.com/triller-sues-tiktok-for-patent-infringement/" target="_blank">potentially for antitrust as well</a>.</p><p>TikTok has <a href="https://www.musicbusinessworldwide.com/were-starting-to-see-a-generation-of-artists-born-and-raised-on-tiktok/" target="_blank">highlighted its relationships with creators as a competitive advantage</a>, which it is hoping to entrench with its <a href="https://newsroom.tiktok.com/en-us/introducing-the-200-million-tiktok-creator-fund" target="_blank">recently announced creator fund</a>. But reports have indicated that <a href="https://www.latimes.com/entertainment-arts/business/story/2020-07-28/creators-leave-tiktok" target="_blank">TikTok creators are beginning to look elsewhere</a>, including to Triller.</p><p>Meanwhile, as Facebook builds its own TikTok competitor on Instagram called Reels, it has <a href="https://www.wsj.com/articles/facebook-seeks-to-reel-in-tiktok-creators-raising-stakes-in-social-media-rivalry-11595928600" target="_blank">reportedly offered big deals to entice TikTockers to defect</a>. TikTok CEO <a href="https://newsroom.tiktok.com/en-us/fair-competition-and-transparency-benefits-us-all" target="_blank">Kevin Mayer has called Reels a copycat product</a>, and pointed out that Facebook's previous "copycat Lasso failed quickly." </p><p>"The same thing can happen for Reels," noted Uzzaman. "Until they are playing in the market, there is no guarantee...Triller is already far ahead of anyone else in the U.S. market."</p><p>---</p><p><em>Sam Blake primarily covers entertainment and media for dot.LA. Find him on Twitter @hisamblake and email him at samblake@dot.LA</em><br/></p>From Your Site Articles
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TikTok made two significant announcements on Thursday, each suggesting a gesture of goodwill to communities on which the user-generated video-sharing platform relies. One was a multi-year deal with the National Music Publishers Association, a trade association that has previously accused TikTok of failing to pay adequate royalties to music rights-holders and reportedly has threatened legal action.
<p>The "new partnership will give NMPA members the ability to opt-in to a licensing framework that allows them to benefit from their works included on TikTok," according to a joint statement.</p><p>Prior to the deal, TikTok had been operating with a bit of a hodgepodge approach toward its licensing arrangements with music publishers. It had short-term contracts with Sony Music and Warner Music's publishing arms, but none with Universal Music Group Publishing since their deal lapsed last year. </p><p>TikTok has faced <a href="https://dot.la/tiktok-privacy-issues-2646002525.html" target="_blank">political backlash related to privacy concerns</a> and from its being owned by ByteDance, a Chinese firm. In June the app was <a href="https://www.nytimes.com/2020/06/29/world/asia/tik-tok-banned-india-china.html" target="_blank">banned in India</a>, one of its biggest markets, and it now faces <a href="https://dot.la/could-u-s-ban-chinese-owned-tiktok-2646359784/could-the-u-s-ban-chinese-owned-tiktok" target="_blank">a threat of similar action from the U.S</a>. The company recently hired Kevin Mayer away from Disney, a move seen by some analysts as <a href="https://dot.la/kevin-mayer-leaves-disney-for-tiktok-chapek-regime-moves-on-2646028687.html" target="_blank">an effort to quell concerns</a> about its relationship to the Chinese government. </p><p>TikTok has also faced criticism from NMPA President and CEO David Israelite, but today's deal seems to have assuaged his grievances.</p><p>"We are pleased to find a way forward with TikTok which benefits songwriters and publishers and offers them critical compensation for their work," he said in the statement.</p><h2>A New Deal for TikTok Creators</h2><p>TikTok's second announcement Thursday described <a href="https://newsroom.tiktok.com/en-us/introducing-the-200-million-tiktok-creator-fund" target="_blank">a new $200 million fund</a> "to help support ambitious creators who are seeking opportunities to foster a livelihood through their innovative content" on the platform.</p><p>There were few details on how the funds will be distributed and who is eligible to receive them. Creators must be at least 18 years old, exceed an undisclosed number of followers on the platform, and "consistently post original content" that adheres to TikTok's community guidelines, according to the announcement. The company will begin accepting applications for a piece of the TikTok Creator Fund starting in August, the statement said.</p><p>Despite its geopolitical setbacks, TikTok has had a banner 2020. <a href="https://www.msn.com/en-us/music/news/tiktok-and-nmpa-reach-a-global-partnership-agreement-exclusive/ar-BB176fnk" target="_blank">According to analytics firm SensorTower,</a> the platform generated over 315 million installs on the iOS App Store and Google Play in the first three months of the year. If true, that would be the most quarterly downloads for any app in the App Store.</p>
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Here are the latest updates on news affecting Los Angeles' startup and tech communities. Sign up for our newsletter and follow dot.LA on Twitter for more.
Today:
- Snap Stock Closes 6% Up After Pompeo's TikTok Threat
- Could the U.S. Ban China-Based TikTok?
<ul class="ee-ul"></ul>
Snap Stock Closes 6% Up After Pompeo's TikTok Threat
<img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzQ0MDk4NC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY0ODg3NTk5OX0.G1PsKdW-h4gVGZ0k_12ltp3eCO1VkH6IfRP6hPSzc6s/image.jpg?width=980" id="e9a13" class="rm-shortcode" data-rm-shortcode-id="5a81610e6918d3d6fd705458d371f4c4" data-rm-shortcode-name="rebelmouse-image" />silver iPhone 6 on top of yellow wooden surfacePhoto by Thought Catalog on Unsplash<p>Snap stock closed nearly 6% up on Tuesday after Secretary of State Mike Pompeo said the U.S. government is "looking at" a ban on Chinese social media apps, including TikTok, because of security concerns.</p><p>Snap didn't respond to a request for comment. TikTok said in a statement that it's a company that's led by an American CEO, with hundreds of employees and "key leaders" in safety, security, product and public policy in the U.S.<br></p><p>"We have no higher priority than promoting a safe and secure app experience for our users," the statement said. "We have never provided user data to the Chinese government, nor would we do so if asked."</p>Could the U.S. Ban Chinese-Owned TikTok?
<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzQ0MDg3Ny9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY0ODA0ODc0OH0.jiz5wtUGbDqa6Nqtj3gKbMLjYkzqIGqiBnGf2fv7PUE/img.jpg?width=980" id="d1531" class="rm-shortcode" data-rm-shortcode-id="e0516651b157cf7c6c38cc2df952823f" data-rm-shortcode-name="rebelmouse-image" /><p>The Trump Administration is "looking at" banning TikTok, the popular social media app owned by Chinese internet giant ByteDance, over concerns that information is being shared with Beijing.</p><p>Secretary of State Mike Pompeo told<a href="https://www.foxnews.com/media/mike-pompeo-tik-tok-china-communist-social-media-spying-fox-ingraham" target="_blank"> Fox News</a> Monday that the United States is considering whether to restrict TikTok and other social media apps after India banned its use. <br></p><p>"We are taking this very seriously and we are certainly looking at it," Pompeo said. "With respect to Chinese apps on people's cell phones, I can assure you the United States will get this one right too...I don't want to get out in front of the president, but it's something we're looking at."</p><p>Pompeo warned American users that downloading the app would leave their private information "in the hands of the Chinese communist party."</p><p><span></span>Culver City-based TikTok, has around 30 million active users in the U.S. and is owned by Beijing-based technology firm ByteDance Ltd. The social media app has received much scrutiny from the national security community. It's no longer allowed on Australian Defense Department devices following a similar ban by the Pentagon due to national security concerns surrounding China's potential access to data.<br></p><p>At the end of June, <a href="https://www.cnbc.com/2020/06/29/india-bans-tiktok-and-dozens-of-other-chinese-apps-over-security-concerns.html" target="_blank">India joined the ranks of those banning TikTok</a>, restricting it and other Chinese social media apps due to security concerns.</p><p>ByteDance has said that all U.S. user data is stored in the United States and Singapore, not on Chinese servers.</p><p>Meanwhile, the <a href="https://www.nytimes.com/2020/07/06/technology/tiktok-google-facebook-twitter-hong-kong.html" target="_blank">New York Times</a> reported, TikTok is withdrawing its app from Hong Kong stores and making it inoperable there after the government began using broad new security laws aimed at blocking opposition to the communist party in the former British colony.<br></p><p>Facebook, Twitter and Google stopped processing Hong Kong's request for user data, according to the report, a move that could hurt their ad revenue.</p><p>TikTok isn't available in mainland China and the company has said that executives outside China run operations.</p><p>___</p><p><em>Do you have a story that needs to be told? My DMs are open on Twitter </em><a href="https://twitter.com/latams" target="_blank"><em>@latams</em></a><em>. You can also email me at tami(at)dot.la, or ask for my Signal.</em></p>From Your Site Articles
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