Microblogging site Twitter might lead a USD 100 million financing round in vernacular social networking app ShareChat, Economic Times reported citing two people in the know. The round is expected to put ShareChat’s valuation at USD 600-650 million.
Twitter is said to be pouring USD 50 million in the round with the rest of the pot coming from existing investors such as Xiaomi, Shunwei Capital, Morningside Venture Capital and Hong Kong-based investment management firm Hillhouse Capital, the source told Economic Times.
Twitter CEO Jack Dorsey is directly involved in the process, the sources said. ShareChat had earlier tried to raise fund from China’s Tencent, without success. Till date, ShareChat has raised around USD 120 million.
“Twitter never makes a minority investment of this kind; it is usually an acquisition. This is very significant for ShareChat, looking at how Chinese players, especially ByteDance, have been able to wean away users onto their platforms,” an industry expert told ET.
Ankush Sachdeva, Bhanu Singh and Farid Ahsan founded ShareChat in 2015. According to Crunchbase the Bengaluru-based local content platform has annual revenue of USD 1.5 million. ByteDance, the parent company of TikTok and Helo, is ShareChat’s major competitor in India.
“ShareChat had been looking to bring in a large strategic round to fight the deep-pocketed ByteDance,” an insider told Economic Times.
ShareChat had accused the Chinese firm last year of copyright infringement and indulging in unfair competition. However, Delhi high court disposed of the case last month after Helo made some design changes.
While Twitter’s likely investment will be financial in nature, it may look to leverage ShareChat’s reach to go beyond its 30-35 million monthly active user base in India, industry trackers noted.
Experts are also speculating a possible integration of ShareChat to the Twitter app.
ShareChat parent Mohalla Tech reported zero revenue in the last financial year. According to regulatory filings, ShareChat’s income from other sources amounted Rs 1.7 crore, but reported a loss of Rs 34 crore.