Investors such as Tencent, Naspers, DST Global and Amazon are in talks to invest in the vernacular social media platform.

Top global investors eye ShareChat valuation of startup expected to hit 400 million
Atom Startups Monday, May 07, 2018 - 15:28

When three IIT-Kanpur alumni, Ankush Sachdeva, Farid Ahsan and Bhanu Singh setup ShareChat in 2015, they might not have imagined that come 2018, their startup, a messaging app that allows the use of vernacular languages, would be chased by the top VCs, taking the valuation of their company to close to $400 million in just three years.

But that is now happening, and the promoters would be left with the choice to select the investors in their company rather than the other way around.

The line-up of investors reportedly showing keen interest in coming on board and linking themselves to ShareChat is more than impressive: Tencent, South African media firm Naspers, investment firms DST Global, Hillhouse Capital and Morningside Ventures, US-based e-commerce giant Amazon and Chinese online media players Toutiao and Kwai are all speculated to be ready and willing and said to be even in discussions with ShareChat. The first named, Tencent of China owns WeChat, the largest messaging and social media platform in China.

For the record, SharChat has already received investments from Chinese electronic major Xiaomi and another Chinese investor, Shunwei and it is possible these investments have actually triggered the current enhanced interest in the startup.

It is now estimated that if these talks do fructify, one might see the current valuation of ShareChat jumping multiple times, from $75 million to $400 million in the next 5 to 6 months. Xiaomi and Shunwei may also participate in the new round along with two more investors out the several listed above.

 Another explanation for this rush to invest in ShareChat could be the realization that there is a qualitative and quantitative change in the internet consumption in India. Cheaper mobile phones with 4G LTE connectivity at affordable costs have reached the tier 2 and tier 3 towns and rurban areas and this has enabled startups like ShareChat to offer regional language services for sending messages.

This has suddenly opened up a huge opportunity for carrying advertisement and promotional messages digitally and therefore opening up the revenue earning potential. The fact that ShareChat has seen its daily user base climb to 10 million is by itself a clear indicator of the app’s popularity and growth. It can include advertising and in-app purchases to monetise this direct reach to customers.

The ShareChat phenomenon is also symptomatic of a remarkable revival in the interest global investors are showing in Indian startups, as the figures seem to reveal.

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