Bengaluru-based social media startup ShareChat is close to raising funding from Tiger Global in its Series E round, which could value the startup at $2 Bn. While speculation about a new funding round for ShareChat has been making the rounds since early this year, the latest reports suggest the valuation would be 2x what had been claimed earlier.
Reports in January claimed that Google would be leading the Series E round in ShareChat with an investment of $100 Mn in a $200 Mn round. Now, Moneycontrol claims that Tiger Global will lead a $200 Mn round with one-third of the funding amount being poured in by the marquee VC. Singapore-based venture fund Temasek is also said to be discussing a potential investment, which is likely to be announced after the Tiger Global round.
It is not immediately clear whether Tiger Global has taken the lead investor position from Google in this round. Neither ShareChat, nor any of the investors mentioned in the report, commented on the speculation.
In January, reports said Google, Snapchat parent company Snap Inc and social media giant Twitter would be investing in ShareChat, at a valuation of more than $1 Bn. After backing Dailyhunt and Glance in December, Google was said to be looking to deploy more capital from the $10 Bn Google For India Digitization fund, announced in mid 2020.
In November, Google was said to be in talks to acquire ShareChat for over $1.03 Bn, after the social media platform has recorded a 166% spike in its monthly active users base during the pandemic from 60 Mn to 160 Mn in November. During this time, the daily average user time spent on the platform also increased from to 31 minutes, the company’s cofounder and CTO Bhanu Pratap Singh told Inc42.
Till date, ShareChat has raised $222.8 Mn in eight funding rounds. ShareChat’s last funding round was in August 2019, 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. The startup was part of the Inc42 Plus soonicorn tracker, expected to reach a $1 Bn valuation by 2021.
Tiger Global closed a $3.8 Bn global private investment vehicle called the Private Investment Partners (PIP) XII in January 2020 to continue backing tech startups in India, US and China. The investment firm’s previous fund PIP XI also raised $3.8 Bn when it closed in 2018 exceeding its initial $3 Bn target. Last year, the US-based firm invested $200 Mn in Bengaluru-based edtech company BYJU’s and in a $39 Mn round in Loginext, a California-based logistics automation platform, along with Steadview Capital.
The investment in ShareChat comes at a time when the platform has seen massive growth in 2020 , which can be attributed to two factors primarily. First, the Covid-19 pandemic and the resultant lockdown, which pushed people further into digital adoption. According to data released by Carat India, smartphone usage increased by 1.5 hours a week and social media consumption nearly doubled to 280 minutes a day. India also hit 500 Mn internet users, riding on the growing popularity in the rural regions.
Secondly, the ban on Chinese apps like TikTok, Likee and WeChat has also pushed users towards ShareChat, which is an Indian alternative to these social platforms. ShareChat had achieved a growth rate of 500,000 new users per hour after the ban on Chinese apps. It currently has more than 100 Mn downloads on the Google Play Store.