Indian social media platform ShareChat has reached a deal to buy the Times Internet-owned MX TakaTak, a short video platform, in a $600-million deal, a combination of cash and stock.
Sources also added that the deal’s value might change towards the closure of the deal.
Mohalla tech has over 2000 employees, and with the acquisition, 180 MX TakaTak will join the firm. MX TakaTak will be rebranded in roughly six months, and the target for the deal’s closure was the end of the month, sources added.
The move is expected to strengthen ShareChat’s short video play through the platform Moj. With the acquisition, Moj (160 million monthly active users (MAUs)), and MX TakaTak (150 million MAUs), together will have a combined active user base of over 300 million. Its local competitor Josh has over 115 million MAUs.
The Mint first reported this development in 2021. Moneycontrol has written to ShareChat and MX TakaTak on the same. The story will be updated with their response.
This acquisition comes when the short-video industry is gaining traction, with Instagram’s Reels leading the pack. According to a RedSeer report, while Facebook’s short videos and Instagram’s Reels continue to dominate in the top 50 cities, its Indian counterparts like DailyHunt’s Josh, Moj, and MX TakaTak have a significant user base in the tier-2 and tier-3 cities.
This also comes when many of the short-video platforms are struggling the grow. Chingari, another short-video platform, recently pivoted to crypto. Another platform Mitron TV has laid off some employees.
Homegrown short video platforms became popular after the Indian government banned TikTok in June 2020. While Moj was launched around the ban, MX TakaTak was launched in July 2020 and Josh in September 2020. All these companies have seen significant growth over the last two years.
According to industry sources, the combined user base will give Moj gives them access to more users.
ShareChat parent Mohalla-tech had raised total funding of $913 million in 2021 on the back of the strong growth its platform Moj witnessed since the TikTok ban in June 2020. In the earlier rounds, it raised $145 million in July, and $502 million in April, led by Tiger, Snapchat, and Twitter.
So far, the company has raised $1.177 billion across eight fundraising rounds. ShareChat and Moj have a user base of 340 million.
According to sources, the company has an annualized revenue of $35 million. “With social and live commerce initiatives, the company hopes to reach a target of US $ 100 million annualized creator earnings by the end of 2023,” the company said in a statement earlier.
Founded in 2015 by three IIT Kanpur alumni- Sachdeva, Farid Ahsan, and Bhanu Singh, ShareChat was one of the early players in regional language content.
What is in it for ShareChat?
A company executive, who did not want to be named, said the userbase, the pace at which we can make that progress, and the network effect that come through are faster with the acquisition of MX TakaTak.
However, others pointed out that apart from the consolidation of the userbase, there is nothing much ShareChat can gain.
On the condition of anonymity, an industry executive pointed out that the ad model in India is broken, and the industry is struggling to monetize, even as Meta-owned Instagram Reels is winning in the short-video space. In that case, the source said, it does not make sense to buy another firm similar to what you are doing.