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ShareChat to buy short-video platform MX TakaTak for $600 million

The move is expected to strengthen ShareChat’s short video play through the platform, Moj.

February 10, 2022 / 11:28 AM IST

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, according to sources familiar with the development.

Sources also added that the value of the deal might change towards the closure of the deal.

Mohalla tech has over 2000 employees, and with the acquisition, 180 employees of MX TakaTak will join the firm. MX TakaTak will be rebranded  in roughly six months and the target for the closure of the deal was 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.

This development was first reported by the Mint in 2021. Moneycontrol has written to ShareChat and MX TakaTak on the same. The story will be updated with their response.

This acquisition comes at a time 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 a time when many of the short-video platforms are struggling through the grow. Chingari, another short-video platform, recently pivoted to crypto. Another platform Mitron TV has laid off some employees.

Home grown short video platforms became popular after the Indian government banned TikTok in June 2020. While Moj was launched around the time of 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 a 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 annualised revenue of $35 million. “With social and live commerce initiatives, the company hopes to reach a target of US $ 100 million annualised 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 are able to make that progress and the network effect that come through is faster with acquisition of MX TakaTak.

However others pointed out that apart from the consolidation of userbase, there is nothing much ShareChat can gain.

An industry executive, on the condition of anonymity, pointed out that ad model in India is broken and the industry is struggling to monetise, 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 that is similar to what you are doing.

(With inputs from Sriram Mani)
Swathi Moorthy
first published: Feb 10, 2022 10:41 am