Toutiao, a personalized news app, announced that it has secured $100 million of Series C financing led by Sequoia Capital and followed by Weibo Corporation at a valuation of $500 million.
[Update] (Shortly after announcement of the funding news, Toutiao is questioned by traditional media for copyright infringement issues. As a content distributor, Toutiao does not generate contents itself, but aggregate news from other media.
The company announced a statement in response, claiming that Toutiao cooperates only with Internet media as a news search engine. The firm added that it operates in full compliance with Robots Exclusion Protocol for search engines. Please click here for the company’s Chinese statement via Sina.
According to accusations from Souhu, Toutiao collects news from third-party content providers, transcoding the contents into XML format and save them on their own servers. The XML contents will then presented to the readers in the news interface of Toutiao App. Souhu added that although Toutiao adds links of the original news sites at the bottom of its news interface, Toutiao will edit the original site and integrate promotion contents and comments of their own. Souhu has claimed an indemnity of 11 million yuan from the company.
The National Copyright Administration has launched an investigation on Toutiao.)
The company has previously received eight-digit USD Series B financing from Yuri Milner, founder of DST, at a valuation of $60 million in 2013. The seven-digit USD first-round funding were received from SIG in 2012.
Launched in August 2012, Toutiao is a feed reader that tries to integrate the most relevant contents for users by gradually learning what the readers enjoy through analysis on data obtained from their social networking accounts.
The fund will be used in R&D of machine learning technologies, according to Zhang Yiming, founder and CEO of Toutiao.
Sequoia Capital is bullish on the mobile news app sector and the technology of Toutiao, according to Neil Shen, founding partner of the investor. Charles Chao, board chairman of Weibo, said that the investment is made to enhance the synergy effects, because Toutiao is now the largest news source for contents shared to Sina Weibo.
Toutiao’s founder Zhang Yiming is a serial entrepreneur who either established or worked for Internet companies like SyncWrite, ticket booking service Kuxun, community platform Hainei, and property rental site 99fang.
The app registered more than 120 million users with over 40 million daily active users, according to data released by the company.
The Chinese news app battlefield is quite crowded. In addition to mobile apps backed by news portals like NetEase, Sina and Sohu, U.S. social magazine Flipboard also entered Chinese market three years ago and planned to construct a local technical team to tap the market. Local news magazine ZAKER claimed more than 40 million downloads, while an another similar app Xianguo claimed 5 million users.
image credit: Toutiao