General Atlantic Plans ByteDance Stake Sale at $550 Billion Valuation

By Echo Wang and Kane Wu

NEW YORK/HONG KONG, Feb 25 (Reuters) - Investment firm General Atlantic is selling an equity stake in ByteDance in a deal that values the Chinese social media giant at $550 billion, two people with knowledge of the matter said, marking a dramatic rise in the privately held shares.

Deal Overview and Valuation Context

The potential stake divestment will be the first since the Trump administration cleared the sale of the U.S. interests of ByteDance's TikTok unit in January, and marks a 66% jump in value since a share buyback last year priced the company at more than $330 billion. 

It also represents a 15% jump from a secondary market deal, which refers to the sale of shares in unlisted companies by existing shareholders to another investor, in November last year that valued ByteDance at $480 billion, according to sources last month.

General Atlantic's Share Sale Timeline

General Atlantic, which first invested in ByteDance in 2017 when the company was valued at about $20 billion, started the process to sell some of its shares in recent weeks and hopes to close the sale in March, said one of the sources.

Details of the financial terms of the stake sale, General Atlantic's shareholding in ByteDance, and how much the New York-based investment firm will own in the social media company after the transaction were not immediately known.

The planned transaction underscores a sharp and sustained rise in the private market valuation of ByteDance, and bolsters the prospects for its other investors who are expected to enjoy a windfall when the company eventually makes its public market debut. 

The sources declined to be named as they were not authorised to speak to the media. ByteDance did not respond to a Reuters request for comment, while General Atlantic declined to comment on the proposed share sale.

Opaque Private Valuation

OPAQUE MARKET VALUE

Secondary Market Trades

Valuations of an unlisted company can vary widely in secondary market transactions, but any such new trade is seen as a test of investor appetite for the company's shares.

ByteDance's market value is opaque since the shares are privately held, and deal terms for the secondary market trades are not publicly disclosed.

Internal Valuation Benchmark

Internally, General Atlantic has valued its ByteDance holding at $550 billion, and it is sensible for them to expect no less in their planned secondary trade, said the second source with knowledge of the matter.

TikTok U.S. Ownership Shift

The proposed sale follows ByteDance's deal to make TikTok's U.S. operations majority U.S.-owned and resolve uncertainties that have plagued both companies since U.S. President Donald Trump threatened to ban the app over national security concerns.

Fund Lifecycle and Liquidity

General Atlantic's share sale comes as some of its funds approach the end of their lifecycle, said the first source. Private equity firms typically have about 10-12 years to raise capital, invest in a fund, and return it back to investors. 

Board Representation

General Atlantic's CEO Bill Ford currently sits on ByteDance's board.

ByteDance, whose revenues have surpassed Facebook owner Meta, has emerged as the world's largest social media company by sales, Reuters reported last year. The Chinese company's annual profit for 2025 could reach about $48 billion.

HSG Continuation Fund Plans

Venture capital firm HSG, formerly Sequoia Capital China, is separately raising a continuation fund that will take over some of its ByteDance shares held by funds that are reaching maturity at a valuation of between $350 billion and $370 billion, Reuters reported last month.    

(Reporting by Echo Wang in New York and Kane Wu in Hong Kong. Editing by Dawn Kopecki, Sumeet Chatterjee and Kate Mayberry)