Former Barclays boss Bob Diamond is looking to take on TikTok as chair of a social media start-up that claims to be worth more than $3bn, despite revenue of only $36mn and less than $1mn in cash on hand last year.
The new direction for the financier comes after video platform Triller agreed an all-share takeover by AGBA, a small US-listed Hong Kong-based financial services platform with a controversial past. Diamond, who has chaired AGBA since September, will serve in the same capacity at the combined entity.
Shares in AGBA have leapt more than 400 per cent since the deal was announced on April 18. In a press release and presentation discussing the deal, AGBA said Los Angeles-based Triller had been independently valued at $3.2bn and that the combined group would be worth $4bn “on a pro forma basis”. Triller shareholders will hold 80 per cent of the shares.
But based on AGBA’s share price of 40 cents before the deal news broke, the 407mn shares it will issue imply Triller agreed to be acquired for $163mn. The Los Angeles-based group reported revenues of just $36mn in the nine months to September and losses of $131mn. AGBA reported a net loss of $49mn on revenues of $54mn last year and cash on hand of $1.8mn at the end of December.
The Triller foray is a departure for Diamond, who once commanded a bank with a trillion-dollar balance sheet. He resigned from Barclays in 2012 after the Libor rate-rigging scandal and has since kept a relatively low profile.
Triller is a controversial — and minuscule — player in the music industry. The start-up in 2019 announced investments from a range of famous artists including Snoop Dogg, The Weeknd, Lil Wayne and Kendrick Lamar. Then chief executive Mike Lu made the bold claim that this “marks perhaps the most significant shift in music since the creation of streaming”.
The company has tried to capitalise on the backlash against TikTok over its Chinese ownership, with Lu’s replacement Mahi de Silva in 2022 calling for every American to delete TikTok. Triller is now led by Bobby Sarnevesht.
But Triller was accused of inflating its users numbers and has been sued by the largest music groups in the world — Universal and Sony — for failing to pay them royalties owed. Triller owed music companies $24mn at the end of September but had only $967,000 of cash on hand, according to a January regulatory filing, in which it reported it had raised $420mn.
Since Diamond’s departure from Barclays he has mostly stuck to dealing in financial services. Earlier this year he merged the UK mid-market broker, Panmure Gordon, with a rival. Panmure is held through Atlas Merchant Capital, his investment vehicle.
Diamond declined to comment on the merger of AGBA with Triller.
Atlas has been an adviser to AGBA, for $83,000 a month — the same amount Diamond is receiving as chair of the financial services platform.
Wing-Fai-Ng, group president of lossmaking AGBA who will be chief executive of the combined group, told the Financial Times he had known Diamond for more than a decade and considered him “like family”.
The Triller deal was announced days before President Joe Biden signed into law an initiative that will ban dominant video app TikTok from US app stores unless its Chinese parent divests the business.
AGBA, originally a special purpose acquisition company set up by a Hong Kong business, and which is domiciled in the British Virgin Islands, has agreed to redomicile in the US as a condition of the merger.
“We believe there is a massive opportunity in social media, in video sharing coming out in the United States in the next year or so and we believe that Triller is by far and away the best positioned company to take advantage of that,” Ng, a former investment banker, told the FT.
Triller was billed as “a pioneering force in the intersection of technology, entertainment and commerce leveraging advanced AI” in an AGBA investor presentation explaining the deal that said the platform had more than 450mn consumer accounts.
Triller declined to discuss its current investors.
AGBA’s majority owner is controlled by Taiwanese businessman Richard Tsai whose family founded the Fubon Financial empire. Tsai also holds a stake in Triller, according to regulatory filings.
AGBA came into its current form after it merged with troubled Convoy Global following the Hong Kong investment adviser’s forced delisting from the city’s stock exchange after failing to produce timely accounts.
Its troubles stemmed from its role at the centre of a 2017 scandal in the city dubbed the “Enigma network” which highlighted a web of tightly-controlled cross-shareholdings in publicly listed companies in the territory. Several former Convoy executives were jailed for fraud in 2021.
The new company began trading in the US in November 2022.
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