TikTok rival Triller to merge with NASDAQ-listed AGBA, creating $4 billion social media and financial services company

Credit: Solen Feyissa

Financially troubled social media app and TikTok competitor Triller is merging with a Hong Kong financial services company to create a $4 billion company that will have its hands in social video, content generation, wealth management, and fintech.

The move could help Triller overcome recent financial difficulties and compete with TikTok at a time when the ByteDance-owned short video app is under pressure from lawmakers in the US, and mired in a licensing dispute with Universal Music Group.

Triller, which began in 2015 as a music video creation tool, and evolved into a music-focused video platform that is often described as a TikTok competitor, announced on Thursday (April 18) that it’s merging with AGBA, a NASDAQ-listed financial services company that operates primarily in Hong Kong.

Under the terms of the all-stock merger, Triller shareholders will own 80% of the new AGBA Group Holding Ltd., while current AGBA shareholders will own the remaining 20%.

According to the announcement, the deal valuates Triller at USD $3.2 billion (considerably less than earlier estimates of $5 billion) and AGBA at $800 million, giving the combined company a pro-forma value of $4 billion.

AGBA says the merger has been approved by both companies’ boards, but is “subject to regulatory and stockholder approvals” and other closing conditions.

“This groundbreaking merger combines AGBA’s financial expertise with Triller’s cutting-edge AI-driven content creation and SaaS capabilities, aiming to transform global digital ecosystems,” AGBA said in a statement issued Thursday (April 18).

“By strategically integrating AGBA’s financial services expertise with Triller’s innovative suite of AI-driven digital content and SaaS offerings, this merger establishes new benchmarks in the convergence of technology, finance, and media.”

AGBA describes itself as a “leading Asia-based financial services company” and says it has 400,000 individual and corporate customers in Hong Kong. AGBA reported full-year revenue of USD $54.2 million for 2023, up 74% YoY.

Triller co-founder Bobby Sarnevesht will serve as CEO of Triller under the new company, while Bob Diamond will serve as Group Chairman and AGBA Chairman Wing-Fai Ng will be Group CEO.

Triller was formed in 2015 as a music video creation platform, and, through a series of acquisitions, it developed a host of social media adjacent businesses, including marketing tools Amplify.ai, an AI-driven tool to connect brands with customers on multiple social media platforms, and Julius, which facilitates online marketing campaigns.

The company’s core business continues to be its music-driven social media platform. Through its partnership with 7digital, Triller gained access to the catalogs of Sony Music, Universal Music Group, Warner Music Group and the Merlin Network for indie labels.

However, Triller has developed a reputation for failure to pay for its use of music. In 2022, Sony Music sued the company for “millions of dollars”-worth of unauthorized music use. The two settled the legal dispute in August 2023, as Triller prepared for an IPO that never took place.

In 2023, it was sued again over unpaid music licensing fees, this time by Universal Music Group.

”We believe this is the most efficient route for Triller to access public capital markets and secure the liquidity needed for rapid growth.”

Bobby Sarnevesht, Triller

In an SEC filing earlier this year, in advance of its planned IPO, Triller revealed that it owes music rightsholders $23.6 million in unpaid fees. The company, which had raised more than $420 million from investors, had less than $1 million in cash and cash equivalents on hand.

The company has also developed a reputation for allegedly exaggerating its platform’s user numbers. In 2020, it asserted it had 100 million active users, but that was disputed by company employees cited by Business Insider. In 2023, analytics firm Apptopia disputed Triller’s claim that it had 550 million app downloads, and estimated a total of 73.2 million. Triller reportedly threatened to sue Apptopia over that claim.

In a statement issued on Thursday, Triller CEO Bobby Sarnevesht said the merger is the most efficient route for Triller to “access public capital markets and secure the liquidity needed for rapid growth.”

He added: ”Triller’s Digital Media, Social Selling, AI, Combat Sports, and SaaS businesses have experienced tremendous growth, and this merger positions Triller to achieve new milestones.”

“AGBA’s expertise in capitalizing on financial value from complex developments and rapid growth will provide the fuel for Triller’s rocket ships.”

Wing-Fai Ng, AGBA Group Holding Ltd.

“With a rich history of setting records and making bold moves, we believe Triller is now on the brink of an exciting future,” said Wing-Fai Ng, Group President of AGBA Group Holding.

“Its groundbreaking technology, coupled with an aggressive and strategic business model, positions it not just as a formidable competitor to tech giants but as a potential game-changer in the industry. AGBA’s expertise in capitalizing on financial value from complex developments and rapid growth will provide the fuel for Triller’s rocket ships. Together, we have a lot to accomplish.”

Triller has at times been seen as a potential alternative to TikTok, which has raised concerns among policymakers in the West over its ownership by ByteDance, a company with links to China’s government. Many Western governments have banned TikTok from government devices, over concerns that the app may be sharing information with the government in Beijing, an allegation that TikTok has denied.

In 2020, the administration of President Donald Trump engaged in a failed attempt to ban TikTok in the US, and Trump himself joined Triller, in an effort to promote it as a TikTok alternative.

In 2022, Triller’s CEO at the time, Mahi de Silva, called on “every American to delete TikTok today and the US Government to take direct and overdue action to ban TikTok.”

De Silva wrote: “I stand with a growing chorus of elected officials, regulators, intelligence officials, other global executives, and consumers who recognize the enormity of the devastating impact of TikTok on our society”.

However, with its new merger with a company operating in Hong Kong, it’s unclear whether Triller itself will be able to avoid similar suspicions about its links to China.

In a prospectus filed with the SEC in 2023, AGBA noted that while it’s listed on the US-based NASDAQ, and the holding company is registered in the British Virgin Islands, its subsidiaries’ principal place of business is Hong Kong, a territory over which China’s government has been exerting increasing amounts of control.

“While AGBA currently does not have any operations in mainland China, there is no guarantee that the recent statements or regulatory actions by the relevant organs of the PRC government… will continue not to apply to AGBA,” the prospectus stated.

The company warned of potential “material adverse impacts” on its business, should China take greater regulatory control over financial companies operating in Hong Kong.Music Business Worldwide

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