Tech

TikTok's former CEO is now making investments on behalf of parent company ByteDance

Key Points
  • Former TikTok chief executive Alex Zhu has been given the task of finding new companies for parent company ByteDance to invest in.
  • Zhu cofounded the Musical.ly app that ByteDance acquired for up to $1 billion and re-branded as TikTok. 
Alex Zhu, CEO of TikTok
John Phillips | Getty Images

Alex Zhu, the former chief executive of TikTok, is now investing in new companies on behalf of TikTok parent company ByteDance. 

The entrepreneur, who cofounded the Musical.ly app that ByteDance acquired for up to $1 billion and re-branded as TikTok, has been tasked with finding technology firms for ByteDance to take equity stakes in. 

Zhu became ByteDance's VP of Product and Strategy in May when ByteDance hired Disney streaming boss Kevin Mayer as TikTok's new global chief executive. A blog post said Zhu would focus on strategy and product design at ByteDance but there was no mention of investing. 

On Tuesday, however, a ByteDance spokesperson told CNBC that Zhu also oversees ByteDance investments as part of his role. 

ByteDance has invested in 21 start-ups, according to Crunchbase. In October 2016, ByteDance invested in Indian content aggregation platform Dailyhunt and in May this year it backed Beijing financial AI start-up Lingxi. 

Prior to setting up Musical.ly in 2014, Zhu spent several years working for enterprise software firm SAP. 

Matthew Brennan, a China-based social media analyst, told CNBC he believes that ByteDance "can't have anyone Chinese as the face of TikTok," which is facing increasing levels of scrutiny in the West. "Alex was a great start-up founder with Musical.ly but he's not in the same league as Kevin Mayer. Both Alex and Louis, the founders, have transitioned at ByteDance into different roles suited to what they are passionate about," he said. 

TikTok has been trying to distance itself from ByteDance as Chinese companies face increasing levels of scrutiny from Western nations. Some politicians in the U.S. and the U.K. say they are concerned that the Chinese government could use TikTok for espionage purposes and that the company could share user data.

In an interview with The New York Times in November, Zhu said he would not share TikTok user data even if President Xi Jinping asked him personally.  

TikTok was banned in India at the end of June and U.S. Secretary of State Mike Pompeo said he is "looking at" doing the same. 

Separately, TikTok pulled out of Hong Kong earlier this month after Beijing imposed a sweeping new security law that gave police more powers in the region.