(Reuters) -Backers of China's Xiaohongshu are looking to sell a part of their stake to the likes of Tencent ( TCTZF ), among others, in a deal that could value the TikTok-rival at at least $20 billion, Bloomberg News reported on Thursday.

GGV Capital, GSR Ventures and Tiantu Capital, key shareholders of the social media platform, have drawn interest from existing backers HongShan Capital Group and Hillhouse Investment, Bloomberg News said, citing people familiar with the matter.

Tencent ( TCTZF ), another existing shareholder, is also considering whether to buy more shares, the report added.

The report comes at a time when TikTok is preparing to shut its U.S. operations as a federal ban is set to take effect, barring a last-minute reprieve.

Xiaohongshu, whose name translates to "little red book", is similar to Meta's Instagram in that it allows users to curate photos, videos and text documenting their lives.

The company, a privately held firm with over 300 million users, had a reported valuation of $17 billion after its latest funding round in July 2024.

Tencent ( TCTZF ), TikTok and its parent ByteDance, and the office of Xiaohongshu CEO Charlwin Mao did not immediately respond to requests for comment.

(Reporting by Aaditya Govind Rao in Bengaluru; Editing by Mrigank Dhaniwala)