After canceling a multibillion-dollar reverse merger last fall, Triller Corp. is filing for a direct listing on the New York Stock Exchange.

The move has some in the tech world thinking that Triller is poised to become a robust competitor to the troubled TikTok.

The Century City-based company, with its eponymous social marketing app, describes itself as an “artificial intelligence-powered platform” for creators and brands to promote content and engage with fans. Triller said that it expects its direct listing to be “the biggest creator-driven public offering in the history of the stock market.”

A source familiar with Triller said the company previously leaned into public comment that it is a close replacement option for TikTok, which has been linked to the Chinese government. TikTok has been banned in several places including New York City, which last week prohibited use of the app on government-owned devices.

Triller said it offers more than TikTok can, and that the app functions as an advanced, AI-enabled social media platform on which users and brands can “generate commerce and build culture” with short-form video content.

The company says that generative and conversational AI is the core of its platform, and allows users like Jennifer Lopez, Charli D’Amelio and Mike Tyson to “easily” mix and edit videos, market themselves and their endeavors and engage with their audiences.

“What we focus on at Triller is creating trackable outcomes, providing deep audience insights around consumers and consumer data and creating positive experiences, all because of the power of AI, allowing our brand and creator partners to operate at superhuman scale,” Triller Chief Executive Mahi de Silva said.

Targeted messages

Triller’s generative AI allows creators to send personalized messages to fans, rather than untargeted, batch and blast responses. The company reported that more than 11 billion digital interactions have been sent between more than 500 million unique users since the app was launched in late 2019.

“Our value proposition with creators is twofold,” de Silva said. “One is, we certainly help them build tighter, more meaningful relationships with their followers. But we also introduce them into brand relationships, where their voices can be the spokespeople for the brand. So, it ends up kind of becoming a virtuous circle where our work with brands helps us introduce creators to them, and then our work with creators helps us introduce brands to them.”

Jeremy Goldman, an analyst for Insider Intelligence Inc., said that although Triller is marketing itself as an AI-first platform, it may be entering that field late in the game. While the company was founded in 2015, the Triller application as it is known today was launched in late 2019. It acquired AI-powered video editing company Mashtraxx later that year. Triller then strengthened its venture into AI in 2021 when it acquired Amplify.ai, which was founded in 2017 by de Silva. As part of the acquisition, he was named chief executive of Triller.

“The company has made inroads into AI, but is that enough when its competitors are doing the same?” Goldman said. “The problem is when it began to enter that conversation in earnest – recently. It’s been behind from a messaging standpoint, which makes it far more difficult to convince the market that you’re a leader. For Triller to effectively market itself as an AI platform, it needs to be more transparent about how its AI is yielding a better user experience.”

Unlike TikTok’s app, Triller’s has no ads or sponsorships. The company said that the biggest difference between Triller and TikTok is its AI engine for music and video editing, and its focus is on helping creators building “deeper, monetizable” relationships with followers. Triller also has a larger focus on creators that are influencers or brands. Content promoted to a user’s Triller feed is based on what videos are newer and more popular, while TikTok uses AI to recommend content based on what the user has previously engaged with and seen.

“With its overall ecosystem and ability to deliver brands with generative AI system solutions … I’m not suggesting that other people won’t compete with Triller, but I think the market is going to see that opportunity,” the source said. “I think there’s a lot of appetite for investors, particularly in institutional investors, that see Triller’s unique combination of its social media platform and its generative AI strength.”

Market listing

A public listing can provide a company with a substantial amount of capital, said Goldman, but many companies have pushed back their initial public offerings in recent years amid volatility in the equity market. Reddit, for example, has been delaying its IPO since first filing for one in December of 2021, and Instacart pulled its plans to go public last year.

Triller is filing for a direct listing rather than an IPO, the latter of which is the more traditional route. With a direct listing, unlike an initial public offering, a company lists its existing shares on a stock exchange without creating new shares and without involving an underwriter or intermediaries.

Triller said it has engaged Cantor Fitzgerald LP as its financial advisor and that it expects to not comply with some of the NYSE’s corporate governance requirements, including having an independent board and having a compensation committee of independent directors.

Triller’s creator count has remained steady at around 2.4 million since the first quarter of 2021, and the company reported about $50 million in revenue last year. While TikTok doesn’t make its metrics public, Forbes reported that the company pulled in about $1.5 billion of app revenue last year.

Triller announced a reverse merger at an estimated $5 billion valuation with publicly traded company SeaChange International Inc. in December of 2021. The deal was mutually terminated last summer, with a source close to the matter attributing the termination to a steep drop in the stock markets and a drop in SeaChange’s valuation.

Goldman said that there is likely one factor driving Triller’s repeated attempts to go public: necessity.

“It is very expensive to try to catch incumbents within the social media market,” Goldman said. “While it’s not the best time to go public … the influx of capital that a company gets by going public is no small thing … (and) there’s not much data that suggests there’s a strong appetite for more social media competitors out there.”

Compliance

In Triller’s S-1 filing with the Securities and Exchange Commission, which was submitted Aug. 2, the summary of risk factors included that it is “not in compliance with the payment obligations of a significant number of our significant music licensing agreements and agreement with other vendors and counterparties.” The filing also noted that Triller may face future allegations of noncompliance with open-source license terms, or of infringement or misappropriation of proprietary software. It said an allegation like this could lead to litigation and, if the license fees for its open-source software change, it could be forced to reengineer its platform or potentially discontinue the sale of its offerings.

On the issue of its noncompliance with licensing agreements, Triller’s team said that the music industry, rights holders and music labels are “litigious by definition.” Other platforms that have faced noncompliance lawsuits include Spotify, which settled a $43.4 million class action copyright lawsuit in 2017. Triller settled a $28 million lawsuit last year with artists Timbaland and Swizz Beatz, who claimed that the company had failed to make payments after Triller acquired an event series from them called Verzuz.

“Unfortunately, it hopes to maintain good relationships with the music business, but it’s not the first time and it’s not the last time the company will be facing litigation with the music industry,” a Triller spokesperson said. “It always strives to be fair, but it will not be bullied.”

In addition, Triller recently settled a lawsuit with Sony Music, which alleged claims of copyright infringement and breach of contract, for $4.6 million.

Public moves

Triller’s filing with the SEC stated that it would list on the NYSE under the symbol “ILLR.” Individuals familiar with the matter said that it’s looking to close acquisitions shortly after trading that would lead to a “significant increase” to its revenue and earnings.

“What Triller does is it focuses on transforming the relationship economy, and relationships are really those between consumers and brands, and creators and their followers,” de Silva said. “Through the power of AI, we accelerate safe one-to-one connections that are really shaping culture, content and commerce. We are increasing human interaction in this messaging-first world, where relationships and trust are really the currency.”