On January 16th, Reuters reported that investors in China's Xiaohongshu are considering selling a portion of their shares to companies like Tencent, potentially valuing the TikTok competitor at over $20 billion, according to Bloomberg News.

Key stakeholders in the social media platform, including GGV Capital, GSR Ventures, and Tiantu Capital, have attracted interest from current investors such as HongShan Capital Group and Hillhouse Investment, as per sources cited by Bloomberg News.

Tencent, an existing shareholder, is also contemplating expanding its stake, the report noted.

This development occurs as TikTok faces a looming federal ban, with Xiaohongshu poised to capitalize on potential market shifts.

Xiaohongshu, which translates to "little red book," resembles Meta's Instagram by enabling users to share photos, videos, and texts depicting their daily experiences.

The privately held company boasts over 300 million users and achieved a reported valuation of $17 billion in its latest funding round.

Requests for comments from Tencent, TikTok, ByteDance, and Xiaohongshu CEO Charlwin Mao's office remained unanswered.