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What happens if TikTok goes dark

Content creators are joining RedNote, also known as Xiaohongshu, as they prepare for the TikTok ban

Supreme Court Hears Arguments In ByteDance And TikTok Case

TikTok educational influencer, Tiffany Cianci, livestreams Jan. 10 outside the US Supreme Court Building during a session on the law to ban TikTok.

Kayla Bartkowski/Getty Images

TikTok could shut down its app to its 170 million US users as soon as Sunday, and creators are already flocking to alternatives, like Chinese apps RedNote and Lemon8.

Though their cap tables will look familiar to VCs—Lemon8 is even owned by ByteDance, like TikTok—they could present the same risks to their shareholders amid the ongoing US-China tensions.

The future for content creators who have relied on the resources that ByteDance funneled into TikTok’s creator monetization streams is also unsure.

The new players

A few social media apps are already gunning to take TikTok’s place if it loses its cache or goes dark. This week, RedNote, a video-sharing and ecommerce app, topped the US app store charts. Thousands of creators are already cross-posting on both.

RedNote, also known as Xiaohongshu, initially launched as an ecommerce app in 2013 and was valued at $17 billion in mid-2024. It was on track to double its profits to over $1 billion last year, Bloomberg reported in December.

Lemon8 is a lifestyle-focused social media app similar to Pinterest that ByteDance has pushed to TikTok users as an alternative. It’s overseen by former TikTok CEO Alex Zhu, Reuters reported.

But RedNote and Lemon8 aren’t necessarily safe. Biden’s legislation was aimed at TikTok, but broadly covers “foreign-adversary controlled applications.” They could risk being similarly deemed as national security threats if they become more popular in the US.

Though these two apps could steal some of TikTok’s market share, Instagram’s Reels is likely to also grab a sizable chunk.

The cap tables

RedNote’s investors include not only some of the most prominent Chinese corporates including Tencent and Alibaba, but also both Granite Asia and HongShan, the Chinese funds formerly affiliated with Notable Capital and Sequoia.

In their previous iterations, both firms invested heavily in consumer bets in China in order to capitalize on a growing, digital-friendly young population.

But both have since severed ties with their Chinese investment arms to minimize regulatory scrutiny.

The TikTok ban has put many VCs in an unusual situation: Firms are split on whether to hold onto their shares, currently holding high valuations on paper, and remain under government scrutiny, or sell them on the secondary market to shed the uncertainty of future returns and tensions with the White House. Though, president-elect Trump is considering an executive order to temporarily suspend the TikTok ban, according to The Washington Post.

Notable Capital, formerly known as GGV, said it sold its ByteDance shares in 2024.

On the other end of the spectrum, Lead Edge Capital founder Mitchell Green has been consistently bullish on ByteDance and has said that the firm has grown its position in the company. Sequoia is also still exposed to TikTok, according to The Information. Sequoia did not respond to PitchBook’s request for comment.

The fallout

The Supreme Court could still intervene to strike down the ban, and ByteDance could still make a last-minute sale of its US operations.

But it’s still a tipping point for the creator economy. ByteDance could even sell off the US app without its algorithm, said Sarah Kunst, managing director at Cleo Capital, a pre-seed and seed firm that invests in the space.

“I don’t know if creators will necessarily stay on TikTok and use it in the same way if it has the same name but the underlying product has massively changed,” Kunst said. “The algorithm has been a key to TikTok’s success in the US: It promotes user stickiness that also facilitates a more lucrative monetization flywheel for creators.”

ByteDance has invested significant resources into creator monetization and rewards on TikTok, which would effectively evaporate for creators if it shuts down the app on Sunday.

Creators and marketing agencies have been preparing for the possibility—but it’ll still be a gut punch for creators and startups whose marketing or revenue rely on the app’s success.

“There is a, call it, a ‘middle-class’ creator, who’s not this huge celebrity but who’s using it to really make a dent in their monthly expenses, where that is going to be a big hit,” Kunst said.

TikTok educational influencer, Tiffany Cianci, livestreams Jan. 10 outside the US Supreme Court Building during a session on the law to ban TikTok.

Featured image by We Are/Getty Images

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  • rosie-headshot.jpg
    Rosie Bradbury is a senior reporter covering startups and venture capital for PitchBook News. Based in New York, she previously reported for the Bureau of Investigative Journalism, Business Insider and Wired. Rosie studied history and politics at the University of Cambridge.
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