MC Exclusive | Tiger to invest in ShareChat at $2 billion valuation

ShareChat is set to catapult to the unicorn club, raising funds up to $200 million led by Tiger Global and others. The ban on TikTok and other Chinese apps triggered a wave of hypergrowth for the company, set to be valued at $2 billion. Sources say it has managed to rise above a litany of competitors in the short video space with its Moj app.

Mumbai / April 06, 2021 / 07:43 AM IST
The content space has seen a number of startup unicorns, firms valued at over a billion dollars, emerge in the past year.

The content space has seen a number of startup unicorns, firms valued at over a billion dollars, emerge in the past year.

Regional language social network ShareChat, whose growth has been on a tear since the ban on TikTok and other Chinese apps, is in talks to raise about $200 million led by Tiger Global Management, valuing it at $2 billion, double what was previously reported, sources say

Tiger is expected to contribute about one-third of the round, while other strategic investors which could include Google may contribute the rest. While most of the round is expected to close in the next few weeks, Singapore-based Temasek is also separately conducting due diligence on ShareChat for an investment, said three people aware of the matter, requesting anonymity.

ShareChat has been among the buzziest Indian startups in the last few years, but especially the past year as the Chinese app ban gave it a new lease of life and turbocharged growth. Sources said ShareChat currently has about 180 Monthly Active Users (MAUs) and 60 million Daily Active Users (DAUs), while its short video app Moj, launched less than a year ago, has 120 million MAU.

Sources said that ShareChat was raising at about $1.4 billion when it was approached by Tiger Global. The company had enough takers and declined an investment, when Tiger upped its valuation to $2 billion to enter the round.

Tiger declined to comment while ShareChat and Temasek did not respond to emails seeking comment.

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The deal continues Tiger’s investing spree in India, even as it raised a mammoth $6.65 billion fund a few days ago. Tiger has once again become a unicorn creator- where its investment doubles or triples the startup’s valuation beyond the billion-dollar mark. Its recent deals include B2B marketplace Infra.market, software firm Innovaccer, online learning firm Unacademy, food delivery firm Zomato, payments firm Razorpay and fantasy sports firm Dream11.

Launched by three IIT Kanpur alumni—Ankush Sachdeva, Farid Ahsan and Bhanu Singh—ShareChat was among the early players in the regional language content and social media space in 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- which all launched along with Moj.

“They are building a real tech company, and their algorithms- the secret sauce to success in social media- is working for them. While the short video space is littered with players, except Moj hardly anyone else is seeing user retention.  They all rode an early wave opportunistically. It looks like Moj is winning that battle,” said one person tracking the company.

Despite significant user growth in the last year, ShareChat’s monetisation is still negligible. But some investors are saying the company is the leader in its space by far, and that at scale monetisation should not be a challenge. 

Another person said the online advertising market in India has grown from about a billion dollars in 2017 to $3.5 billion in 2020, an encouraging sign for these platforms. Although Google and Facebook continue to dominate the online advertising pie, investors are betting that the growing market can benefit local platforms too.

The content space has seen a number of startup unicorns, firms valued at over a billion dollars, emerge in the past year. News aggregator Dailyhunt and  InMobi-owned Glance were both valued at over a billion dollars in December last year.

ShareChat was in acquisition discussions with Google, Microsoft and others last year according to multiple media reports, but these talks changed to a minority stake sale instead when the company and its investors felt ShareChat can still grow independently and build a business. It was valued at $600-650 million in August 2019 when it raised $100 million from Twitter and Trustbridge Partners. Its other investors include Elevation Capital (SAIF Partners), Lightspeed Ventures India and India Quotient, besides China’s Xiaomi, its spinoff Shunwei Capital and Morningside Ventures.
M. Sriram
first published: Apr 6, 2021 07:43 am

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