General Atlantic, Sequoia Capital are driving Oracle’s TikTok bid: WSJ

Investment firms General Atlantic and Sequoia Capital are drivers in Oracle’s bid for TikTok, according to The Wall Street Journal. Yahoo Finance's On The Move panel discuss.

Video Transcript

- There are two big investors in TikTok's parent company, ByteDance, who don't want to be left out in the cold if and when a TikTok US operations sale happens. At least, that's according to a Wall Street Journal report today. Melody, it's very interesting to see some insight into the behind-the-scenes maneuvering here behind this sale of TikTok.

- Exactly. An already complicated and nuanced sort of approach, and now, of course, two of the largest VCs in the country, Sequoia and General Atlantic, are behind this push for Oracle to get involved.

Let's back up a little bit. Originally, when we were thinking about the contenders to buy TikTok's US business, Microsoft was seen as the front runner. It was pretty clear. I had also communicated with TikTok comms people, and they confirmed that Microsoft was interested, but there were other players in the mix. Quickly, that story escalated, and now Oracle is in the mix, with Sequoia and General Atlantic making that push.

And the reason for this is because Microsoft would be able to do it alone. In many regards, they were looking for a group of buyers to possibly join in on them, but Sequoia and General Atlantic, which are actually-- they both hold board seats on ByteDance, they were going to be left out, perhaps, in that transaction. Quickly identifying that, now they are finding perhaps a particularly politicized company, Oracle, where the founder, Larry Ellison, is good buddies with President Donald Trump, to say, hey, this could be an alternative, even if it's not a natural bedfellow, even if Oracle largely operates in the B2B side of things, and not the consumer space in the way that a Microsoft has been able to.

What I want to point out that's particularly interesting is Microsoft's CEO, Satya Nadella, last year had said that politics-- staying out of politics, in particular-- had worked in his favor, and that's why he was able to get that $10 billion deal for the Pentagon-- for the Pentagon cloud computing business. And of course, that was against Amazon, where Jeff Bezos has been very vocal and critical of President Donald Trump. Now, it may work to his disadvantage, right? Because President Trump, when asked about Oracle potentially being the buyer of the US operations of TikTok, looked very favorably at that, right? And said, oh, I love Larry, this would be a good match, potentially.

I do also want to point out that members of both Sequoia and General Atlantic have hosted fundraisers for Donald Trump in the past. There have been, you know, some efforts there, even prior to this potentially happening. And members of Sequoia have actually hopped on the phone with different people of the administration at the White House. So it just shows that, OK, initially being apolitical may work, but perhaps, with this administration, it could backfire.

- And guys, you know, Melody and I are both broken records on this, discussing on both "On the Move" and "The Final Round" in the last couple weeks, but let me just reiterate that it's not guaranteed who the buyer will be. And that continues to be the case. And people were so gung ho and kind of hasty at first, just based on a few scattered reports, to say, well, it looks like it's going to be Microsoft. And then came reports that actually, hm, Google and Facebook are interested. And that shouldn't have surprised anyone.

And now you have some very legit powerhouse names backing Oracle's bid. And we've also discussed how Oracle, in some ways, is a strange buyer, isn't it, with no consumer-facing social media properties. But data, hello. They're going to love getting that customer data and making hay with that. I also think the Larry Ellison-Trump friendship and connection is not irrelevant here. But point being, it could be any horse at this point. And I'm not going to make any declarations about who the buyer is until we see an announcement, OK, it's done, TikTok US operations have been sold to x company.

- Indeed. All right, thanks for the reminder there, Dan.