ByteDance is further expanding into the e-book market with a sizable investment in one of China’s largest digital literature companies.
The TikTok owner has signed an agreement to buy an 11.23% stake in IReader Technology for 1.1 billion yuan ($166 million) through a wholly owned subsidiary, IReader said in a stock filing.
After the completion of the deal, which is subject to review and approval at IReader’s general meeting of stockholders, ByteDance will become the third-largest shareholder of IReader.
Under the agreement, the two companies plan to jointly develop the e-reading business and strengthen cooperation in commercialization, advertising operation and content creation, according to the filing.
Established in 2008, Shanghai-listed IReader had 170 million monthly active users in the first half of 2020 on its digital reading distribution platforms, which include its flagship namesake app allowing users to read novels, magazines and anime as well as listen to audiobooks.
The share purchase is part of ByteDance’s broader deployment in the online reading industry. In April, ByteDance made most of the novels on its popular Toutiao app free to access and announced plans to integrate all fiction writing on its platforms into one dedicated channel named Tomato Novel.
As of June 2020, the number of readers of online literature in China reached 467 million, up 8.1% from the end of 2018, according to the 46th Statistical Report on Internet Development in China released by the China Internet Network Information Center (CNNIC).
Guan Cong contributed to this report.
– This article originally appeared on Caixin Global.