TikTok faces well-funded rivals, regulatory scrutiny in U.S.

As the controversial social media company TikTok faces scrutiny from the U.S. government and possible closure, one of its chief rivals is wasting no time to try and overtake it by raising hundreds of millions of dollars and stealing users FOX Business has learned.

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Triller, an American rival to TikTok based in Los Angeles has commitments from investors of $200 million to $300 million. Triller plans to use the funds to raise awareness of its platform, enhance service quality, and attract content creators through possible direct payments, according to two people with direct knowledge of the matter.

The fundraising effort is operating in the private security market – this is where businesses do not need to make various disclosures required in the public markets. Farvahar Partners, a boutique merchant bank, is one of the leaders in the endeavor. Farvahar Partners is run by former Bank of America executive Omeed Malik.

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Despite regulatory scrutiny from the Trump administration, which believes TikTok is a tool the Chinese government is using to spy on Americans, TikTok is still the most popular provider of short videos in the world. Tiktok has 800 million active users worldwide.

But Triller, while trailing, is moving fast to catch up. A self-described “social video community where you can show the world who you are,” Triller has had its app downloaded 150 million times and boasts 65 million active users a month. Plus, the Los Angeles Times reported Tuesday that several top creators are leaving TikTok for Triller.

Triller declined to comment on these developments but did not deny it has raised hundreds of millions.

Beyond Triller, TikTok finds itself in the crosshairs of several tech players. Social network giant Facebook, Inc. is also looking to get into the short video space by launching its service, Reels, next month.

According to the Wall Street Journal, Facebook is offering money to top creators to join its fledgling service. Facebook unveiled a similar service, Lasso, in 2018 that failed to catch on.

While TikTok is a formidable competitor, people close to Triller believe it’s well-positioned to replace TikTok.

“Triller represents a form of patriotic capitalism -- national interest and excellent returns should not be mutually exclusive,” Farvahar Partners' Malik tells FOX Business, “Moreover, even as it relates to other US apps, creators want their followers to be on a site that respects user privacy and doesn’t implement censorship. Triller doesn’t have the same historical issues Facebook does on such matters.”