ByteDance is valued at $350 billion, and HSG's new fund raises capital to acquire shares.
On January 8th, according to AVCJ citing two sources familiar with the matter, venture capital firm HSG (formerly Sequoia Capital China) is raising a continuation fund that will acquire some of its ByteDance shares at a valuation of between $350 billion and $370 billion.
A continuation vehicle (CV) is a new type of investment tool established by private equity firms to transfer shares from their existing portfolios.
This valuation is higher than the level implied by ByteDance's recent share buybacks but lower than the level implied by the share acquisitions in November last year. ByteDance's valuation was pushed up to $480 billion.
The two sources and another person familiar with the fundraising said that HSG plans to transfer shares from several of its portfolio companies (whose investment cycles are about to end) to the continuation fund.
Limited partners, the investors in the soon-to-expire funds, can choose to sell their shares in the portfolio companies to other investors during the CV fund's fundraising period.
Three sources said that ByteDance shares will dominate the composition of the new fund. The three sources declined to be named as the information has not been made public.
One of the sources said that HSG holds slightly more than 11% of ByteDance, making it one of the largest external shareholders of the social media giant. It is unclear how many of these shares will be incorporated into the CV fund.
HSG declined to comment. ByteDance did not respond to requests for comment. Industry publication AVCJ first reported the news on Wednesday.
Despite the lengthy process of TikTok's US spinoff, ByteDance's valuation has soared in the past year, mainly due to its strong revenue growth.
Reuters reported that ByteDance's revenue in the first and second quarters of 2025 exceeded that of Meta, the parent company of Facebook and Instagram, making it the world's top-ranked social media company in terms of revenue.
One source and another person familiar with the company's financial details said that ByteDance's revenue continued to grow in the next two quarters, and its annual profit in 2025 could reach approximately $48 billion.
In addition, with its chatbot Doubao, ByteDance is expected to become China's leading consumer artificial intelligence application provider in 2025, as Doubao has the largest share of monthly active users in the Chinese market.
One source and another source said that in November last year, Chinese venture capital firm Capital Today won a bid in the private secondary market and acquired some ByteDance shares from the private equity division of the Bank of China. The valuation of ByteDance in this transaction reached $480 billion.
Reuters contacted the two companies for comment on this matter but received no response.
The sources said that ByteDance launched an employee stock buyback program in the third quarter, with a valuation of over $330 billion, a 5.5% increase from the previous buyback in March.
Another person familiar with the matter revealed that the company offered a new round of share buybacks to existing investors in November last year, with a valuation similar to that of the employee buyback program.
According to data from AVCJ Research, HSG led ByteDance's $100 million Series C financing in 2014, when ByteDance's valuation was approximately $500 million, and the company only operated its popular news aggregation app Toutiao at that time. In addition, HSG also participated in ByteDance's $1 billion Series D financing in 2016.
HSG spun off from Sequoia US in 2024. Its founder and managing partner, Neil Shen, is still one of the five board members of ByteDance. The other members include CEO Liang Rubo, Arthur Dantchik, co-founder of Susquehanna International Group (SIG), William Ford, CEO of General Atlantic, and Xavier Niel, founder of French telecom giant Iliad.
This article is from the WeChat official account "Bianews" (ID: bianews8), author: Jutou. It is published by 36Kr with authorization.