The company said regional language social network ShareChat had been valued at $2.1 billion in its latest $502 million funding round. The company said that the ban on TikTok and other Chinese social media apps had turbocharged its growth.
The round has been led by Tiger Global Management, Snapchat parent Snap Inc and existing backer Twitter and Lightspeed.
Moneycontrol first reported on April 6 that Tiger talks to back ShareChat at a $2 billion valuation.
The deal also makes ShareChat India’s latest unicorn- privately held firms valued at over a billion dollars, and the fifth unicorn this week alone, after online pharmacy PharmEasy, investment app Groww, social commerce firm Meesho and fintech firm Cred. India now has 9 unicorns in 2021 so far, compared to 11 in all of 2020.
ShareChat’s sister app, Moj, has scaled to 120 million Monthly Active Users (MAUs) in nine months. The short video platform is also a big draw for investors.
“When we saw a large vacuum emerge on June 29 with a lot of short-video apps exiting the market — we knew this opportunity was for us. There were millions of short-video creators already trained for creating that content supply. The real game was therefore going to be on building the most relevant feed for the user, and we were the only Indian company that had built a world-class feed recommendation system for short-form content,” co-founder and CEO Ankush Sachdeva said.
Launched by three IIT Kanpur alumni- Sachdeva, Farid Ahsan, and Bhanu Singh in 2015, ShareChat was among the early players in the regional language content and social media space India, a space with dozens of players in the last year. New entrants include MX Player’s TakaTak, Chingari, Mitron TV, and Dailyhunt Josh’s, all launched along with Moj.
ShareChat gained early traction and saw investors including Lightspeed, Elevation Capital (SAIF Partners), Shunwei Capital, and Xiaomi. The latter two are particularly important as Chinese investors understand the content space and its potential far better than most other investors, having seen the success of Tencent and ByteDance in China.
However, ByteDance launched a ShareChat clone, Helo, in mid-2018 and spent tens of millions of dollars a month to beat ShareChat at its own game and gain the upper hand.
The move seemed to be working as ShareChat could not burn money the way billion-dollar firm ByteDance did, and its fundraising of $100 million from Twitter in 2019 was a challenging one, sources say. Its valuation also barely increased from $460 million in 2018 to $600 million in 2019.
However, the ban on Chinese apps changed everything, and the company saw traction like never before.
“We are at a significant inflection point in our company’s journey — as the internet penetration further deepens in India, we are well-positioned to expand our ecosystem of products to 1 Billion+ MAUs cumulatively. We have seen how large the short-video market is in China — with around 80% of the entire Internet population using one of the short-video products(Douyin, Kuaishou, etc.) daily,” Sachdeva said.