Beijing tightens its grip with stricter restrictions on investing and fundraising activities of such firms.
While the Chinese tech behemoth is restructuring its internal venture capital and investment team that backs startups, another team focusing on firms that might benefit ByteDance’s operations is being revamped, according to Bloomberg, citing persons familiar with the subject.
According to Reuters, under new guidelines being established by China’s Cyberspace Administration, enterprises that service more than 100 million active users and have made sales of more than US$1.5 billion must get regulatory clearance before engaging in any investment or fundraising activities.
This rule may have a significant impact on companies such as Baidu, Didi Global, Meituan, Alibaba Group, and Baidu. ByteDance has separated its external investment arm into strategic and financial wings. The strategic wing aims to support enterprises that may discover synergies with its own.
Employees in the financial investments team were informed by the executives of ByteDance that the team would be dismantled, and they have been advised to seek employment elsewhere, either internally or externally, according to two of the sources who spoke to Reuters.
After a study earlier this month revealed investments with “poor synergy,” ByteDance said that it was dismantling its group-level strategic investment team and relocating staff to other business divisions in a statement
It did not reply to a request for comment from Reuters on the dissolution of the financial investments unit.
In a major organisational reshuffle back in October, ByteDance created six business units, including TikTok and its Chinese variation ‘Douyin’. The company said that its strategic team overhaul is meant to enhance collaboration efforts between business operations and strategy research.