The ByteDance logo can be seen in this illustration taken on November 27, 2019. REUTERS/Dado Ruvic/Illustration
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BEIJING, Jan 19 (Reuters) – TikTok owner ByteDance is downsizing its investment team and dissolving a subgroup focused on financial returns in response to regulatory crackdowns in China, three sources familiar with the matter said on Wednesday.
ByteDance had divided its external investment arm into financial and strategic wings, the latter aiming to fund companies that could find synergies with its own.
Financial investment team members have been told by ByteDance executives that the team is being disbanded and have been encouraged to seek opportunities internally or externally, two of the sources told Reuters.
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ByteDance said in a statement that it is dissolving its group-level strategic investment team and moving staff across different business areas after a review earlier this month highlighted investments with “low synergies”.
It did not respond to a Reuters request for comment on the dissolution of the financial investment team.
ByteDance’s six divisions, created in October in a major organizational restructuring, include TikTok and its Chinese version Douyin.
The overhaul of its strategic investment team is designed to “improve collaboration between strategy research and business operations,” the company said.
The Beijing-based firm has reduced the size of its investment team as Beijing has ramped up anti-monopoly efforts to curb corporate giants, four people familiar with the situation said.
Over the past year, Beijing has cracked down on antitrust abuses, banned private tutoring groups and reined in a property developer debt spree, wiping hundreds of billions from the market cap of some of its biggest companies, including e-commerce giant Alibaba and social media giant Tencent (0700.HK ).
ByteDance’s recent high-profile investments include the $4 billion acquisition of Shanghai-based gaming studio Moonton Technology last year. Moonton is best known in Southeast Asia for its online game Mobile Legends.
It has also acquired virtual reality headset maker Pico and backed Chinese coffee chain brand Manner.
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Reporting by Yingzhi Yang, Xie Yu, Zhang Yan, Cheng Leng, and Brenda Goh; Edited by Jacqueline Wong, Louise Heavens and Alexander Smith
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