A new exhaustive report details the Institutional Investors & private funds invested in ByteDance, the parent company of TikTok, as the most visible example of a longstanding pattern of U.S. venture capital & private equity investments into Chinese technology companies.
SAN FRANCISCO, CA / ACCESSWIRE / May 31, 2024 / Data compiled by nonprofit firm, Future Union, indicates that numerous institutional investors - the largest source of capital for venture capital, private equity, and hedge funds - have considerable interests in ByteDance, the controlling parent company of TikTok. The recently released report, titled "The ByteDance Spotlight Report," highlights the investors in TikTok and serves as a specific case study review of the most visible example of the pervasive role that U.S. venture capital and private equity, and associated institutional investors, have had in elevating Chinese startups - and the commensurate technology innovation ecosystem - enabling China to achieve a technological sophistication that matches, or exceeds, U.S. capabilities across numerous technological disciplines.
In a statement, Andrew King Executive Director of Future Union said:
"History shows that there are no ‘days off' to safeguarding national security, protecting democratic institutions and upholding the U.S.-led, global rules-based order. China aspires to create a new rubric for global leadership where protections for intellectual property rights and the rule of law have proven illusory, and under China's revised National Privacy Law all efforts in the private sector are simultaneously required to be pledged to assist the state in pursuit of all national sovereignty goals. America and our allies face a new future in which our technology - the plans for our ships, our jets, our offensive and defensive strategies - has been turned against us. Make no mistake, as China charts a new path using our expropriated intellectual property, our technology, our research, and our capital, the U.S., and indeed, the world will suffer if investors fail to act to safeguard our collective security."
As the report indicates, U.S. investors are the single largest source of funding for ByteDance. The private equity, venture capital, and hedge funds that have invested in ByteDance since its founding in 2012 are some of the largest, most well-known, and politically connected funds in the world.
The release of this report follows the April 2024 Congressional approval of legislation restricting Chinese ownership of TikTok, which has catapulted the deep ties between American investors and Chinese technology companies into the spotlight. Future Union reviewed the investors and financial ties between Wall Street, global finance, and China's technology acceleration, which included the U.S. public pensions, university endowments, and nonprofits/foundations, detailing for the first time the complicated ties and extent of Western investments in Chinese venture funds and U.S. funds investing in Chinese-based startups. Future Union's prior report, titled the "Rubicon Report: Venture Capital and Private Equity Funds Invested in China," illustrated the role that such investors and capital allocators have had in China's rise, more specifically manifested in ByteDance's fundraising history, which was illuminated in the case study. As the ByteDance Spotlight Report data reveals, U.S. venture capital and private equity funds have had an outsized role in the evolution and growth of China's rival technology base, with firms such as Sequoia Capital China (now HongShan) and GGV Capital (now Granite Asia) also prominently featured in the bipartisan Outbound Investment report released by the House Select Committee on the Chinese Communist Party on February 8, 2024 that investigated five U.S. venture capital firms for their investments in technology startups in China and the implications of those investments.
This report, as well as Future Union's Rubicon Report findings, released in conjunction with the House Select Committee on the Chinese Communist Party's Outbound Investment report, demonstrates that more forward-looking, principled investment leadership is demanded in order to discourage and restrict critical technologies from reaching Countries of Concern1, like China, and emerging on proxy battlefields like Syria and Ukraine.
Click here to access the Report.
###
About Future Union
Future Union is a bipartisan organization designed to galvanize the private sector to address a new wave of emerging security and technology challenges facing the United States and its allies. We believe that democracy can no longer just exist to promote capitalism. Capitalism must be a force for democracy.
Future Union is intent on catalyzing the private sector to make a difference for technological and capital markets-led democracy, specifically, by safeguarding free market principles and limiting the economic power that Countries of Concern1 wield in the U.S. and in the free markets. We aim to fuse private sector innovation and democratic-capitalism to ensure that the mutuality of contract under equal rule of law principles are abided by, thus, preserving free and fair markets competition.
As America and our allies vie to lead the next generation of innovation and technology, Future Union hopes to encourage a broad corporate re-evaluation and definition of risks to ensure that democratic, free market principles remain at the forefront of geopolitical leadership and prevail against competing systems.
Contact:
[email protected]
Andrew King
www.futureunion.co
1 Countries of Concern are set forth as those with military capabilities that could threaten democratic national security. The most recent "foreign countries of concern" designation was made by the Secretary of State on December 29, 2023, and included the People's Republic of China, the Democratic People's Republic of Korea, the Islamic Republic of Pakistan, the Russian Federation, and the Islamic Republic of Iran, among others.
SOURCE: Future Union