Indian star company ShareChat just completed $100 million in financing last month, and Tencent, the Chinese Internet giant, has handed it to the olive branch.
Editor’s note: This article is from WeChat public account “Zhixiang.com” (ID:passagegroup), author Luo Ruiqi.
From “China Silicon Valley” Shenzhen to “India Silicon Valley” Bangalore, there is no direct flight, at least one transfer, spending 9 hours, but this does not stop the enthusiasm of China’s capital Nuggets India. Indian star company ShareChat just completed $100 million in financing last month, and Tencent, the Chinese Internet giant, has handed it to the olive branch.
The payment information of Pitchbook, an independent third-party financial data company, shows that Tencent is considering acquiring a 30.77% stake in ShareChat, which has been negotiated for half a year. If successful, this will be a new sample with typical significance in the story of Chinese capital going out to sea: In ShareChat’s shareholder seats, Chinese faces may account for 70%. Chinese companies Tencent and Xiaomi may have the final say in the largest social company in India.
Founded in 2015, ShareChat is a star company that has grown rapidly with the popularity of the Internet and smartphones in India. It is also the “red-hot chicken” of the Indian entrepreneurial circle. The prototype of the ShareChat product is a dialect chat room, which is now evolving into a stream of information, providing content including graphics and video. On ShareChat, users can follow others, and they can also explore humorous, fashion, health, education, religion and more through interest categories.
Online for three years, according to the latest report from the Indian media in September, ShaWith more than 8 million active users on rechat, it is one of the most popular content platforms in India. The “Dialin Content Platform” is the gold selling point of this Indian Internet company.
Founders Ankush Sachdeva, Bhanu Singh and Farid Ahsan are all from the Indian Institute of Technology (IIT). Before ShareChat, they developed 13 products together. But ShareChat has opened up a new era of entrepreneurship in Indian Internet companies.
” Among the 1.3 billion Indians, there are less than 100 million people who speak English.” Indian journalist Vishal Krishna said in describing the Indian dialect market. But at the same time, most websites and apps in India must operate in English.
One unsurprising conclusion is that we will never see these dialect users from smaller Indian cities and rural areas on Facebook, but the “next billion Internet users” of all world-class Internet companies. In the blueprint, they are among the most promising people.
But these dialect users have also blocked the entry of foreign companies. The difficulty is that foreign companies face content in complex Indian languages, or data. The official language of the Indian Constitution is 22, the search giant Google supports 9 official Indian languages, and ShareChat offers 14.
Chinese shareholders behind ShareChat
But the dialect is not an obstacle to capital. To some extent, ShareChat is already a Chinese company.
After the latest round of Twitter funding in August, according to the Indian government’s payment information and Pitchbook data, among the ShareChat shareholders, Chinese companies and capital stocks remain at around 40%. Among them, Xiaomi Company and its closely related Shunyi Fund together accounted for 18.36%, SAIF Saifu through its Indian company accounted for 14.79%, Yuxin Capital accounted for 5%.
(ShareChat financing situation | Data source: crunchbase)
The Safran Investment Fund from China launched a $350 million exclusive fund in 2011.The door invests in Indian startups. In 2016, ShareChat Saifu led the seed round financing of ShareChat. At that time, the Sharechat, which had just been established for one year, had a daily active number of 100,000.
In 2017, users’ content on ShareChat began to outpace the Indian national communications app WhatsApp, and ShareChat’s total revenue increased 14 times. This year, in Beijing, two and a half hours away from Bangalore, Lei Jun, the founder of Xiaomi, noticed the company.
In January 2018, Xiaomi Company led the ShareChat’s B-round financing. The venture capital fund of Xiaomi’s founder Lei Jun was followed by Capital and Safford Investment Fund. Eight months later, Shun Capital once again led a new round of investment in ShareChat. In addition to Xiaomi and Saifu, the new Chinese investors Morningside Capital and Yuxin Capital were introduced. Morningside Capital is also the old shareholder of Xiaomi, and has continued to vote since the beginning of the Xiaomi A round.
India is a strong market for Xiaomi. Canalys data shows that in the first quarter of 2019, the global shipments of Xiaomi’s mobile phones dropped by 10%, but in the Indian market, Xiaomi maintained its growth momentum. India is the only country in which Xiaomi’s shipments in the Asia-Pacific region are still growing. Xiaomi’s market share here reached 31.4%, far exceeding the 12% share in China during the same period.
For Xiaomi, supporting a local social media has a strategic significance beyond financial returns. For ShareChat, accepting investment from Chinese mobile hardware companies is not just about money and pre-installation. An obvious win-win situation is that all mobile phones sold by Xiaomi in India are pre-installed with ShareChat.
Today, ShareChat is one of India’s largest social platforms, and India is Xiaomi’s overseas strong market, ranking first in the Indian smartphone market for eight consecutive quarters.
India – Global Capital Diamond Harvesting Area
Chinese companies and capital have played a significant role in the rise of ShareChat. The most important thing is the judgment of Chinese capital – predicting the next trend of one billion people is actually a very difficult problem. However, those familiar with the Chinese entrepreneurial ecosystem may make more accurate assumptions, and the miracle of growth in China may also be what will happen in India.
ShareChat founder Ankush Sachdeva said in an interview with Chinese media recently that China is even more advanced in business model than the United States, and that China’s population is more similar to India’s population. Therefore, through Chinese investors, ShareChat can judge how different products develop, and how to choose a large number of people in a specific scenario.
ShareChat also from yourselfThe Chinese shareholders learned the algorithm recommendations there. After getting the investment in Xiaomi and Shunwei, ShareChat said it will use the funds to mine user information and develop technology in machine learning and artificial intelligence.
Ankush Sachdeva has come to China for financing three times and has negotiated with many Chinese investment circles. It is reported that he has been learning Chinese, has reached a very skilled level, he also has his own WeChat account.
And after 20 years of development of China’s Internet, the first generation of entrepreneurs Lei Jun, Ma Huateng and established investment institutions know more than others in India with a population of 1 billion. What a successful social company means.
In China, Tencent relies on its own social network to build strong barriers including games, digital content/copyright, big data, finance, etc., and lay down half of the Chinese Internet. WeChat is already a national application in China.
But overseas, WhatsApp and Facebook blocked the pace of WeChat going out to sea. Tencent wants to copy a WeChat in India and has to learn from Ali’s approach and turn to invest in local companies. If you successfully cooperate with ShareChat, it will be an effective complement to Tencent’s continued expansion of the social landscape.
Tencent has been in India for a long time. In 2015, Tencent invested in Practo, a medical company in India; in 2016, Tencent successively invested in social networking company Hike and travel company MakeMyTtip. In 2017, Tencent invested $700 million in India’s most valued Indian e-commerce giant Flipkart, and invested in Ola, India’s largest travel company. Since then, Tencent has continued to invest in the parent company of the Indian financial technology company PolicyBazaar, Indian music streaming service company Gaana, food delivery application Swiggy… Tencent’s investment in India has involved all aspects.
China’s capital is heading to the global market and has drastically completed the staking through investment and acquisition. Previously, the most successful case of Chinese company Nuggets India was the investment of Ant Financial in the Indian financial company Paytm.
After continuous capital injection, Alibaba holds a 30.15% stake in Paytm, the largest shareholder. Through Alibaba’s continuous stream of technology and business models, Paytm quickly emerged as a local payment giant. andAnt Financial Services solved the license and regulatory issues in the sea with Paytm. Ali’s investment in Paytm provides an excellent reference sample for Chinese companies to go out to sea, and the impact of Chinese capital on ShareChat will exceed this case.
As overseas capital came to China 20 years ago, Ankush Sachdeva said that for Chinese capital, India is their “diamond harvesting place” and China lives in the future.