ByteDance in talks with Reliance for investment in TikTok

TikTok has been banned in India since June 29 as fallout of geo-political tensions with China that led India slap a no entry to TikTok along with other 58 apps over security and privacy concerns.

ByteDance is engaging in early discussions with Reliance Industries for backing TikTok’s business in India in a move to potentially save the popular video app’s fate in its biggest market by users, two people familiar with the matter have confirmed.

India was TikTok’s largest market outside of China with over 200 million users. ByteDance employs 2,000 people in the country whose fate hangs on the company’s ability to either convince the government to allow them to operate or sell it.

Reliance and ByteDance began conversations late last month and have yet to reach a deal, the sources said, requesting anonymity as the talks are private. TikTok’s business in India is being valued at more than $3 billion, one of the sources said.

An investment in TikTok could help the oil-to-retails giant Reliance, the most valuable firm in India, make deeper connections with consumers. Reliance operates the telecom venture Jio Platforms.

Even as Jio Platforms has amassed nearly 400 million users in India in less than four years of its existence, its consumer-facing apps have struggled to replicate that appeal.

The preliminary talks between the two companies come as ByteDance also struggles to retain some key employees in India. A handful of high-level executives at the company, including a policy head and Rohan Mishra, who oversaw ByteDance-owned Helo app’s operations in India, left the company last week, according to people familiar with the matter.

ByteDance has assured employees that it is in conversation with the Indian government to resolve New Delhi’s concerns and does not plan to layoff employees in the country.

ByteDance is separately engaging with Microsoft to sell its business in select markets, including the U.S., the Windows-maker confirmed earlier this month. Last week, as per news source, the two companies had broadened the scope of the deal to include TikTok’s business in other markets, including Europe and India.

Scores of local startups, including Twitter-backed ShareChat and Times Internet’s Gaana and MX Player, have launched standalone apps or integrated features to replicate the social experience TikTok provided to users. The local apps have claimed to have added tens of million of new users in recent weeks.

Facebook, which launched Reels in Instagram in India last month, has seen the daily engagement across its family of services surge more than 25% since the ban on TikTok, according to a person familiar with the matter.