China’s Toutiao acquires US VC-backed video app Flipagram

Flipagram will operate as an independent subsidiary after the acquisition. The merger allows Toutiao to expand its global reach to the US, while Flipgram can get access to Toutiao’s recommendations system and other key technologies, according to a statement. 

Toutiao, which means "headlines" in Chinese, was founded in March 2012. The platform generates customized content feeds, including articles and short-form videos, for users based on artificial intelligence technology. As of January, it had about 175 million monthly active users, with each user spending an average of 76 minutes per day on the platform.

The Chinese start-up previously received backing from SIG China and Yuri Milner. In June 2014, it closed a $100 million Series C round from Sequoia Capital and Chinese microblog operator Weibo. In October, Toutiao’s parent company ByteDance invested in a $25 million Series D round for Indian online news aggregator Dailyhunt.

Flipagram was launched in late 2013 as a free app, allowing users to create short-form videos and photo slideshows with music attached to them. The company claims to have more than 200 million users, with over half a billion videos being created through its app.

The US start-up raised a $70 million Series B round from Sequoia, KPCB and Index Ventures in 2015. Farhad Mohit, co-founder and CEO of the company, told Recode that Sequoia was responsible for facilitating the acquisition by Toutiao.

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