Video sharing app TikTok passed 1 billion downloads last month, and its parent company ByteDance is ramping up its efforts to monetize those users with ads, while also continuing to add more features to the app to keep people engaged. In a move that could help both of those efforts, ByteDance has made a small acquisition, picking up the assets of a defunct startup called GeoGif, which developed location-specific, animated stickers and overlays for videos, suggested to users when they capture video or images in specific places.
It seems that the location-based, animated element of what GeoGif built is the key part of what might be coming soon to TikTok, since the app already had a range of visual and audio filters and stickers to alter appearances and your voice, or just to embellish and further personalize your video.
Here’s the general gist of what GeoGif can do for a video if you are, for example, in Miami for Spring Break. (Note: This is not the greatest example given the naff and objectifying subject matter, but it’s the only example the startup has provided.)
The terms of the acquisition have not been disclosed, although we are asking both Dean Glas, one of GeoGif’s co-founders, as well as ByteDance and we will update if we learn more. In any case, the deal appears to include only the assets of the startup, which ceased operating more than two years ago, judging by activity on its social media accounts and LinkedIn profiles. CEO Dean Glas and his co-founder Mendy Raskin are now both working on new startups.
“We are excited for GeoGif to have a new home at TikTok,” said GeoGif’s CEO Dean Glas, “and we believe our features will be enjoyed by millions of users. We will work closely to make sure it’s a smooth transition that provides a long-term positive impact for the TikTok community.”
A TikTok spokesperson also confirmed that the features that were built for GeoGif will get rolled into the main TikTok app: “GeoGif and TikTok share a common goal which is enabling people to connect, consume, and create great content. We’re impressed with what the team at GeoGif has built and with TikTok’s resources, we believe that we will deliver an even better user experience for our millions of users who love using TikTok to express their creativity through short videos.”
With TikTok, China’s ByteDance has created one of the world’s biggest video apps — and subsequently become one of the world’s most valuable startups — and it has used acquisition as a key lever for adding both users and features.
To help break into the US, the main app itself merged with Musical.ly last year after being acquired for between $800 million and $1 billion by Toutiao (a ByteDance sub-brand) in 2017. Other acquisitions have included Flipagram — another music-video app and startup — in 2017 for an undisclosed sum; the AR selfie camera FaceU in 2018, reportedly for $300 million; payments startup UIPay also in 2018; and — just last week — it appears ByteDance acquired a gaming startup, Mokun Technology, from previous owner 37 Interactive, also for an undisclosed sum.
It’s likely that the GeoGif acquisition was for a small sum: the company did not have anything close to mass-market traction, and it had raised only seed round of an undisclosed amount. It was originally spun out of parent company Bivid — which is also now defunct but had been a hyperlocal social network akin to YikYak, Highlight and Zenly, suggesting friends and others who were near to you for chit-chat and simply to know their whereabouts.
TikTok already runs ads and has other paid features in China, but in Western markets like the US, the company has largely only been doing limited runs and tests of different formats, such as this native video ad test we spotted in February.
In January, a leaked ad deck from the company in Europe also mentioned several advertising and marketing units it was running and planning to run including brand takeovers; in-feed native video; hashtag challenges; Snapchat-style 2D lens filters for photos; and 3D and AR lenses. It’s the latter of these where GeoGif’s efforts could be rolled in.
Also in January, Bloomberg reported that in 2018, ByteDance, for the first time, had failed to beat its own revenue forecasts: It had told investors when it was fundraising a monster $3 billion round that it expected to make between $7.4 billion and $8.1 billion in revenues for the year, and sources said it would be coming in at the lower end of that range.
These are, relatively speaking, huge numbers when you consider that ByteDance’s currency is social media apps, which often spend years making no money at all. But in the context of missing growth expectations, this slower expansion could be a lever for the company launching more ad formats in more places and launching more products, such as the Slack competitor it is also reportedly building.