New Delhi: In China, people have quit their day jobs to work for a live streaming app called Inke.
It works like this: A live streamer can be discovered on the platform and paid by viewers through virtual gifts bought online. The viewers pay for these virtual gifts through real money (in-app purchases). The live streamers get 30% of this with the platform taking the rest. Some people make as much as $50,000 to $60,000 a year, just by live streaming.
India is not yet there but similar virtual transactions could take off here soon, according to Kavin Bharti Mittal, founder and chief executive of Hike Messenger.
“The infrastructure is so much like China 4-5 years back. We believe that is going to happen in India," he said.
Inke’s is the kind of revenue model that Mittal says he would like to build for his company in the next three years before he exhausts the money raised from Tencent and Foxconn (around $175 million). He may go for another round of funding before that but he knows it won’t be easy.
Funding now depends upon revenue and Hike will soon have to enter into what Mittal calls a “revenue generation" phase.
But, Hike will take some time before it builds a scale to start monetizing. The company claims around 100 million users but this is a number that has been questioned.
Mittal says Hike will soon release data on active users.
“I think we should double, if not triple the size before we start doing that. The best part is—virtual items have 100% margins, you can make it at home," he said.
Until then, he will focus on growing Hike.
On Tuesday, Hike launched its wallet, a mobile payment tool built within its messenger. The wallet supports UPI (unified payments interface)- based payments. UPI is a free solution that can be used by anyone with a bank account and a user ID to send and receive money.
Hike is also working towards making the app a common platform for digital transactions of all kinds, a model that is similar to China’s WeChat messaging app, owned by Hike’s investor Tencent.
Introducing a wallet service appears to be the first step in that direction.
“We are in the growth phase. But we are laying the foundation for something bigger. Payments will enable us to generate revenue on the platform," Mittal said, adding that he is yet to spend a majority of money that Foxconn and Tencent have put in.
Some money is being spent on next updates for Hike 5.0. Hike has filed 60 patents including camera, machine learning etc. It employs around 300 people in two offices and has just opened a new office in Bengaluru.
“We have created a big foundation..and are now focusing on reiterations," he said.
All the while, Mittal is keenly aware of how easy it is to go wrong with a technology start-up.
For instance, there are lessons to be learnt from the business of his friend Kunal Bahl, co-founder and chief executive of Snapdeal.
“I think they went down a certain path and sometimes the paths don’t work out. When you take bets it is important not to bet the company," Mittal said.
“For start-ups, our life cycle is how much money we have in the bank. So you have to optimize on that and make bets according to that."