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Business News/ Companies / News/  China’s Tencent in talks to join ShareChat’s fundraising round
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China’s Tencent in talks to join ShareChat’s fundraising round

Tencent has decided to invest through convertible notes as India in April 2020 required all fresh foreign direct investments (FDI) from bordering countries to secure prior approval to prevent opportunistic takeovers of Indian companies

The Chinese investor plans to put in up to $100 mn. (Photo: Bloomberg)Premium
The Chinese investor plans to put in up to $100 mn. (Photo: Bloomberg)

China’s Tencent Holdings is in talks to join the ongoing funding round of ShareChat, two people aware of the development said, as the social media platform seeks to power the growth of its short video app Moj.

The Chinese investor plans to invest as much as $100 million in ShareChat through convertible notes, the people cited above said on condition of anonymity.

ShareChat, operated by Mohalla Tech Pvt. Ltd declined to comment, while Tencent Holdings did not respond to requests for comment.

On 30 May, Reuters reported that ShareChat had raised $300 million from Google, Temasek and Times Internet at a valuation of approximately $5 billion.

Tencent has decided to invest through convertible notes as India in April 2020 required all fresh foreign direct investments (FDI) from bordering countries to secure prior approval to prevent opportunistic takeovers of Indian companies, the people said.

Following border clashes in June 2020, New Delhi banned over 200 Chinese apps, including ByteDance-owned TikTok and Tencent-owned WeChat.

Tencent, which is keen to double down on its existing Indian holdings, has been doing so through convertible debt, a third person aware of the development said on condition of anonymity.

In April 2021, news portal Entrackr reported that the Chinese investor had invested $225 million in ShareChat through convertible debentures via two European special purpose vehicles, Zennis Capital BV and Hlodyn BV. Tencent has also invested in e-commerce platform Cars24, digital ledger app Khatabook, Flipkart, Udaan and Practo over the last three years.

Tencent’s investment plans follow the government’s step in March to extend the timeline for converting debt into equity from five years to 10.

India has more than 350 million online video users, with users growing nearly twice as fast as markets such as China and Indonesia, Bain and Co. said in an October report. Moj, MX TakaTak, Josh, Roposo and Zili have more than 100 million downloads each.

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ABOUT THE AUTHOR
Ranjani Raghavan
Ranjani heads the startup and new economy team at Mint. She covers the investment and the deals ecosystem, which takes her into the secretive world of high finance — mostly private equity and venture capital firms and the people running them. She also writes about the Indian corporate world which includes old fashioned business executives and their emerging challengers from the tech ecosystem.
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Published: 03 Jun 2022, 12:35 AM IST
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