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ShareChat To Join Unicorn Club With $100 Mn Microsoft Infusion

ShareChat To Join Unicorn Club With $100 Mn Microsoft Infusion

Microsoft is said to be close to investing in ShareChat even as it is in talks to acquire ByteDance’s businesses in India and other countries

ShareChat’s existing investors are expected to join Microsoft in the round, which could see ShareChat becoming the latest startup in India’s unicorn club.

Days after India’s ban on TikTok, ShareChat claimed to have seen a growth rate of 500,000 new users per hour

Even as speculation is rife that Microsoft may buy out ByteDance’s business in the US, Canada, Australia, New Zealand and even India, the US tech giant is now reportedly close to investing $100 Mn in Indian social media platform ShareChat

According to a Mint report, Microsoft would just be one of the investors in ShareChat, and the $100 mn funding would only be one-third of what the social media startup is looking to raise in its latest round. ShareChat’s existing investors are expected to join Microsoft in the round, which could see ShareChat becoming the latest startup in India’s unicorn club. 

The company’s last funding round was in August last year, when it raised $100 Mn in a Series D round led by Twitter, with existing investors Shunwei Capital, Lightspeed Venture Partners, SAIF Capital, India Quotient and Morningside Venture Capital also investing further. That funding pegged the company’s valuation at $650 Mn. 

Till date, the company has raised $222.8 Mn in eight funding rounds, according to data available on Crunchbase. ShareChat was part of Inc42’s UpNext series on soonicorn startups in 2019, and was expected to reach a $1 Bn valuation by 2021.

ShareChat did not respond to queries about the fund raise.

Microsoft Betting Big On Social Apps?

Interestingly, ShareChat launched its short video app Moj on June 29, the same day as the ban on TikTok and 58 other Chinese apps in the first wave of the ban.

ShareChat’s Moj has seen a massive spike in users since launch as users gravitated to homegrown alternatives. Since its launch on June 29, the app has garnered 22 Mn downloads, according to data on app analytics portal Sensor Tower. While both ShareChat and Moj are positioned as ‘Made in India’ on the Google Play Store, ShareChat’s investors in previous rounds include Shunwei Capital, a Chinese venture capital fund run by Xiaomi cofounder Lei Jun, as well as Chinese electronics giant Xiaomi. 

With Chinese internet giant ByteDance coming under deep scrutiny in the US, the company is looking to sell its regional businesses to Microsoft. ByteDance apps TikTok, Helo and CapCut were among the 100-plus Chinese apps banned by India over the past two months. 

With its India business crippled, ByteDance is speculated to be in talks with Microsoft to sell the India unit to the tech giant along with other regional businesses. Reports this week suggest ByteDance could sell TikTok India either to foreign investors or Indian buyers. ByteDance would then license its technology to the company and share revenue.”

ShareChat Growth In Lockdown

Founded by IIT-Kanpur alumni, Farid Ahsan, Bhanu Singh and Ankush Sachdeva, in 2015, ShareChat is a regional language-focussed social media platform, which banks heavily on user-generated content. It boasts features like anonymous chat, direct messaging, original video content under the banner of ShareChat Talkies. It was also a part of the 2018 edition of the most coveted list of India’s most innovative startups — 42Next by Inc42.

Days after the ban on TikTok in July, ShareChat claimed to have seen a growth rate of 500,000 new users per hour, with Indian users scurrying to TikTok alternatives in the short video sharing space. Accessible in 14 regional languages, ShareChat’s core base is in Tier 2 and Tier 3 cities. The app currently has more than 100 Mn downloads on the Google Play Store, and is ranked fourth on the ‘top free’ apps chart on the Play Store. The same ranking features sister app Moj in the third spot.