Indian social media firm ShareChat has raised more than half a billion dollars to grow its popular short-video app Moj, just months after the Indian government banned ByteDance-owned rival TikTok from the country.
The five-year-old company, which has raised $502m from investors including Tiger Global Management, Snap and Twitter, now has a valuation of $2.1bn. The ShareChat app has 160m monthly active users, while Moj has amassed more than 120m monthly active users within nine months of its launch.
The Indian government’s ban of more than 200 Chinese apps late last year following a border dispute was a “macro event . . . and we did benefit from that,” said Ankush Sachdeva, chief executive of ShareChat, which also counts Shunwei Capital, launched by the founders of Chinese mobile phone maker Xiaomi, among its investors.
“ShareChat grew multifold post that ban . . .[and] we also took advantage of the short-video vacuum and launched Moj,” he added.
ShareChat, based in Bangalore, offers its meme and video-sharing platforms in 15 regional Indian languages, but not in English, making it extremely popular among Indian smartphone users in smaller cities and towns, where English is not the preferred language. Users of both apps spend an average of more than 30 minutes on them every day, according to the company.
For US tech companies, India represents a massive growth opportunity. Only 40 per cent of the population had internet connections in 2019, according to McKinsey, and 86 per cent of those were under the age of 40. By 2025, the number of internet users is expected to exceed 970m, according to Statista.
“As internet penetration increases in semiurban and rural economies, ShareChat’s . . . platform is poised to expand dramatically by bridging into online purchases of goods and services,” said Scott Shleifer, partner at Tiger Global Management, which invested in the company’s latest Series E round.
“Meanwhile, Moj is well positioned to seize the opportunity presented by the growth of short video in India. We are impressed with the team’s understanding of these rapidly evolving technologies and its ability to execute quickly,” he added.
In the vacuum left by TikTok, Indian users have been offered a dizzying array of options for short-video entertainment. Apps that have sprung up in the past year include Josh, TakaTak, Roposo, Mitron, and Chingari. Google and Microsoft have both recently invested in the parent company of Josh, while Google also led a $145m investment into the firm behind Roposo.
ShareChat claims to set itself apart through its content recommendation technology. The apps use machine-learning algorithms to surface tailored content for individual users, based on their tastes. “Machine learning is a very big investment area for us. [We are] building that whole infrastructure and scaling our team across the world,” Sachdeva said.
The company has hired five directors of artificial intelligence in both the US and the UK in the past six months, and doubled its workforce in the second half of 2020, including 50 AI engineers.
Competition between US and Chinese tech giants for the Indian market has intensified in the past few years, spurring multibillion-dollar bets in the country’s start-ups. Following a bloody border clash between Indian and Chinese soldiers in June 2020, animosity from the Indian government has caused Chinese investment deals to freeze, smoothing the way for US investors looking to expand beyond into the fertile Indian internet market.
In the past week alone, two other start-ups — social commerce app Meesho, and fintech Cred — have raised money at a valuation above $2bn from US investors including Facebook and Tiger Global respectively.