Bengaluru/Mumbai: ShareChat, a regional language video and picture sharing app, is in initial talks with Tencent Holdings Ltd and other investors to raise as much as $200 million, according to two people familiar with the matter. The Bengaluru-based social media startup, run by Mohalla Tech Pvt. Ltd, has been struggling to grow over the past few months after Chinese media giant ByteDance launched ShareChat clone Helo and short video app TikTok in India last year.

If ShareChat is successful in raising the funds, this will give the company the required firepower to take on ByteDance, the world’s most valuable startup.

(Paras Jain/Mint)

ShareChat is seeking a valuation of $600-700 million in the latest round of funding, one of the people cited above said on condition anonymity. The company was valued at around $460 million when it last raised money in September.

“(ShareChat) is looking for strategic investors with social media expertise," said the same person cited above.

The Shunwei Capital-backed company would benefit from an investment by Tencent, best known for its WeChat messaging service, as well as numerous games and other content platforms.

Tencent’s deep pockets and strategic expertise could help ShareChat counter Helo, TikTok and other Chinese rivals.

Competition has been intensifying in the Indian regional language content space, with the entry of the deep-pocketed Chinese rivals.

ShareChat attracted a lot of investor interest in 2018, but the entry of Chinese competitors has made investors a little wary, according to several people in the industry.

However, if the funding talks with Tencent and other investors go through, ShareChat will continue to be the flag-bearer of Indian regional content startups.

ShareChat declined to comment on its funding plans, while Tencent did not respond to queries till the time of publishing this story.

Launched by three IIT Kanpur alumni—Ankush Sachdeva, Farid Ahsan and Bhanu Singh—in October 2015, ShareChat slowly became an investor darling in the regional content space.

The content startup attracted several investors, including the likes of Shunwei Capital, smartphone maker Xiaomi Corp., SAIF Partners and Lightspeed Venture Partners.

Citing App Annie numbers, Mint had in January reported that the ShareChat app saw its daily active users plateau over the last quarter of 2018 at five million as of December-end.

In contrast, both Helo and TikTok witnessed stupendous growth trajectory—with the former at almost four million daily active users and the latter at about 20 million daily active users as of December-end.

Other content startups continue to raise capital.

Mint recently reported that regional language news aggregator DailyHunt is going to close a $60 million funding round led by Goldman Sachs.

Moreover, regional language publishing platform Pratilipi is in talks to raise $15-20 million from new and existing investors, including Omidyar Network and Nexus Venture Partners, as Mint reported earlier.

Close