In 2009, long before Jeff Yass became a Republican megadonor, his firm, Susquehanna International Group, invested in a Chinese real estate start-up that boasted a sophisticated search algorithm.
The company, 99Fang, promised to help buyers find their perfect homes. Behind the scenes, employees of a Chinese subsidiary of Mr. Yass’s firm were so deeply involved, records show, that they conceived the idea for the company and handpicked its chief executive. They said in one email that he was not the company’s “real founder.”
As a real estate venture, 99Fang ultimately fizzled. But it was significant, according to a lawsuit by former Susquehanna contractors, because of what it spawned. They say that 99Fang’s chief executive — and the search technology — resurfaced at another Susquehanna venture: ByteDance.
ByteDance, the owner of TikTok, is now one of the world’s most highly valued start-ups, worth $225 billion, according to CB Insights, a firm that tracks venture capital. ByteDance is also at the center of a tempest on Capitol Hill, where some lawmakers see the company as a threat to American security. They are considering a bill that could break up the company. The man picked by Susquehanna to run the housing site, Zhang Yiming, became ByteDance’s founder.
Court documents reveal a complex origin story for ByteDance and TikTok. The records include emails, chat messages and memos from inside Susquehanna. They describe a middling business experiment, founder-investor tension and, ultimately, a powerful search engine that just needed a purpose.
The records also show that Mr. Yass’s firm was more deeply involved in TikTok’s genesis than previously known. It has been widely reported in The New York Times and elsewhere that Susquehanna owns roughly 15 percent of ByteDance, but the documents make clear that the firm was no passive investor. It nurtured Mr. Zhang’s career and signed off on the idea for the company.
