China’s hottest media startup worth $11 billion with new funding

Toutiao headquarters in Beijing / Photo credit: Tech in Asia

Chinese news site Toutiao has reached new heights with a recent round of fundraising, reported Reuters today citing a personal privy to the matter. The Beijing-based startup is now worth US$11 billion.

Bytedance, the company that created Toutiao, declined to comment.

Rumors have been circulating in Chinese media for months about Toutiao’s latest round of funding,  which is estimated to be about US$1 billion. The company currently counts Sequoia Capital China and Russian billionaire Yuri Milner among its investors.

Bytedance is growing an empire of news and media-related ventures

Toutiao aggregates news and other media from various domestic partners, including state-owned Xinhua News and Caixin, a Chinese finance and business publication. It prides itself on its machine learning capabilities, which are used to create customized content feeds for users based on their preferences and data taken from their social-networking accounts.

This latest round of investment will come in handy as Bytedance expands overseas and beefs up its AI research. In February, it announced its acquisition of US video app Flipagram for an undisclosed amount. In the same month, the company also hired Ma Weiying, the former assistant managing director of Microsoft Research Asia, to manage Toutiao’s artificial intelligence lab.

Bytedance is growing an empire of news and media-related ventures, which includes TopBuzz, an English news app focusing on viral content and online trends. Last year, it invested US$25 million into DailyHunt, an Indian media aggregation site.

According to the company, the news platform had about 175 million monthly active users as of January, with each user spending an average of 76 minutes per day on the site.

Doubling down on AI

China has no shortage of online media sites. Large tech firms such as Tencent and Sina have their own online news portals. There are also numerous media startups, such as Jiemian, a Shanghai-based news startup, as well as Pear Video, which focuses exclusively on short video content.

However, Toutiao’s strength is its use of machine learning to personalize news recommendations, as well as its continued investment in artificial intelligence research. Currently, advertising forms the majority of Toutiao’s revenue, though the company is seeking other revenue channels. Last September, Toutiao signed a partnership with Chinese ecommerce site JD.com to let its users buy products through the news app.

Toutiao’s AI lab is working on several projects, including a mechanism that combines human reviewers and automated analysis of posts and comments to identify fake news. The company has also created an artificial reporter called Xiaoming that can automatically generate short news reports on European soccer games. The AI team is also using machine learning to analyze its Quora-like Q&A feature, and provides automated news summaries for articles on Toutiao.

“We really want to use machine learning to understand question-and-answering and comments and news,” Li Lei, research scientist and director of Toutiao’s AI Lab, told MIT Technology Review in an interview. “Toutiao Lab’s mission is to push the boundaries of machine learning and AI and to transfer that into products.”