Farnsworth Group to Pay $125 Million for Control of TikTok Rival
Farnsworth Group to Pay $125 Million for Control of TikTok Rival
(Bloomberg) -- A group of investors, including former MoviePass Chairman Ted Farnsworth, who agreed to buy an 80% controlling stake in the Singapore video-sharing service Lomotif will pay about $125 million in the deal, according to people familiar with the matter.
The agreement with Zash Global Media and Entertainment Corp., announced this week without any disclosure of financial terms, marks one of the biggest exits by a tech startup in Singapore in recent years. With the acquisition of Lomotif, the financier behind once-popular subscription service MoviePass is now trying to disrupt the online video-sharing market dominated by the likes of ByteDance Ltd.’s TikTok and Kuaishou Technology.
Zash is seeking to build Lomotif into a global challenger to its much bigger China-based competitors in the fast-growing video-sharing business. The acquisition is set to be completed concurrently with Zash going public in the U.S. through a deal with Vinco Ventures Inc., announced last month.
Representatives of Zash and Lomotif did not immediately respond to requests for comment.
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Lomotif founder Paul Yang will continue to lead the service upon completion of the takeover. The platform has more than 300 million monthly video views, and has increased its community more than fivefold in the past three years.
Yang started Lomotif in 2014 in Singapore’s Block 71 building where a cluster of scrappy upstarts work to take advantage of cheap rent. Yang and his co-founders developed the mobile app as a simple project to create videos quickly. But it started getting traction among hip hop fans in the U.S. So with $33,000 he raised in a seed funding round, Yang moved to the U.S. to learn about the users. Later, Lomotif became especially popular among music fans in Brazil.
MoviePass, which once let U.S. moviegoers see a different film in theaters every day for just $10 a month, imploded two years ago after it struggled to make a profit and alienated customers by frequently changing its service terms.
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