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The parent company of India's ShareChat will acquire local rival MX's short-video platform in an around $700 million deal, two sources told Reuters, as competition heats up in the sector where foreign investors have placed major bets.

Indian short-video apps have become popular since New Delhi banned ByteDance's TikTok and some other Chinese apps in 2020 following an India-China border clash. After TikTok was banned, ShareChat's parent entity, Mohalla Tech, launched a similar short-video sharing app named Moj, which has over time garnered 160 million users and counts Meta Platforms Inc's Instagram Reels as its key rival.

In a cash-and-stock deal, ShareChat's parent entity will acquire MX's short-video platform called TakaTak, the sources familiar with the discussion said.

The deal, valued at around $700 million, could be announced within days, said one of the sources. Reuters is first to announce the two sides have reached a deal.

ShareChat, which is valued at roughly $4 billion and counts Singapore's Temasek Holdings and Twitter among its investors, declined to comment. A spokesperson for MX said she did not have any immediate comment.

With the MX TakaTak acquisition, ShareChat's parent will now have two short-video apps in its portfolio.

The company has plans to deepen its use of artificial intelligence tools and reach a much wider audience as Moj has roughly 160 million users in India, while MX has roughly 100 million, said one of the sources.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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