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Court records, mistakenly made public, tell the story of ByteDance’s birth, its bumpy road to success, and the role of Republican mega-donor Jeff Yass.
By Mara Hvistendahl and Lauren Hirsch
Mara Hvistendahl is an investigative journalist focusing on Asia, and Lauren Hirsch covers deals and Wall Street news.
In 2009, long before Jeff Yass was a Republican mega-donor, his company, Susquehanna International Group, invested in a Chinese real estate startup with a complicated search algorithm.
The company 99Fang is committed to helping buyers find the best home. Behind the scenes, employees at a Chinese subsidiary of Yass were so deeply involved, records show, that they conceived the company’s concept and carefully selected its chief executive. They said in an email that he was not the “real founder” of the company.
As a real estate company, 99Fang eventually went bankrupt. But it’s important, according to a lawsuit filed by former Susquehanna contractors, for what it generated. They say 99Fang’s chief executive, and he’s looking for a generation, has resurfaced at another Susquehanna company: ByteDance.
ByteDance, which owns TikTok, is now one of the world’s most valuable startups, worth $225 billion, according to CB Insights, a firm that tracks venture capital. ByteDance is also in the midst of a typhoon on Capitol Hill, where some lawmakers see the company as a threat to U. S. security. They’re considering a bill that could simply baffle the company. The guy selected through Susquehanna to manage the housing site, Zhang Yiming, the founder of ByteDance.
Court documents reveal a complex origin story of ByteDance and TikTok. The recordings include emails, chat messages, and memos from Susquehanna. They describe an average entrepreneurial experience, tensions between founders and investors, and ultimately a complicated search engine that only needed one target.
Records also show that Mr. Yass’s company was more deeply involved in the genesis of TikTok than previously thought. It has been widely reported in the New York Times and elsewhere that Susquehanna owns about 15% of ByteDance, yet the documents prove it. He made it clear that the company was not a passive investor. This fueled Mr. Zhang’s career and approved the company concept.
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