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Home » NewsBlog » Musical.ly, the lip-syncing video app, is going to sell for at least $800 million

Musical.ly, the lip-syncing video app, is going to sell for at least $800 million

The Chinese company is three years old, and it took off like a rocket. Now it may have slowed.

Three years ago, Musical.ly didn’t exist. Now the app, which lets teens make videos of themselves lip-syncing, is set to sell for at least $800 million.

The Shanghai-based company has agreed to sell to Jinri Toutiao, a Chinese media startup that had already bought Flipagram, which competed to some degree with Musical.ly, earlier this year.

The deal hasn’t closed yet, but Bloomberg pegs the price at $800 million, while the Wall Street Journal puts it at “$800 million to $1 billion,” which is the range I’ve heard. Without a public disclosure of the price, you’re generally safe betting on the lower number on deals like these and assuming that the bigger number includes hard-to-hit earnout targets.

Musical.ly is interesting for a bunch of reasons:

  • It’s indicative of the astonishing trajectory a hit app can enjoy, fueled by a worldwide population of mobile phone owners.
  • It’s the first Chinese-bred social app to enjoy real success in the U.S.
  • It may be the most successful video app not owned by an internet giant like Facebook or Google.
  • It effectively served as a social and messaging app for a very young user base — likely too young to be using social and messaging apps.

The caveat: The fact that Muscial.ly is selling three years after launch, and a year after a funding round that reportedly valued the company around $500 million, is an indicator that its owners believe its growth curve has flattened out.

The company says it has 60 million users, but I’m told that it acquired most of them in the first two years of its existence, and that it hasn’t been able to expand beyond the tweens and teens that first adopted the app.

For what it’s worth, a Google Trends query shows a peak in the summer of 2016. Which may not map with actual user numbers, but seems directionally correct:

Recode – All Go to Source
Author: Peter Kafka

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2017-11-11T03:00:34+00:00November 11th, 2017|Categories: News, Social Media|Tags: |
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