By Senad Karaahmetovic
ByteDance, the parent company of the blockbuster social media app TikTok, reportedly witnessed an operating loss of $7.15 billion in 2021, up from $2.14 billion in 2020.
Revenue soared almost 80% to $61.7 billion in 2021, but costs soared as well as the social media company invested heavily to sustain its skyrocketing growth, the Wall Street Journal reports.
According to the internal report shared with employees and seen by the WSJ, TikTok’s parent company reported a cost of sales of $27.4 billion for last year, up 79% from 2020. Financial reports showed that the entertainment business spent $14.6 billion on R&D and $19.2 billion on selling and marketing activities.
However, ByteDance also made a profit in Q1 of this year with revenue exceeding $18 billion, up nearly 54% YoY.
At the end of Q1 2022, ByteDance reported it had $74 billion in total assets and $42.6 billion in cash and cash equivalents. The company has 130,000 employees globally, the WSJ also reported citing people familiar with the matter.
“No startup could afford to invest billions and billions and billions of dollars in user acquisition like that around the world,” Snap (NYSE:SNAP) CEO Evan Spiegel said last month.
ByteDance raised funding in late 2020 at a $180 billion valuation. The company’s valuation was then estimated at $300 billion this year when it offered to buy back its shares from investors. The WSJ reported earlier that ByteDance traded closer to $400 billion on the secondary market.