Twitter in talks to invest over $50 million in ShareChat

There is a large and connected population living in the tier 2 and tier 3 cities, which now being targeted by most companies. Reports now suggest that Twitter has entered the scene and is reportedly looking to invest $50 million in ShareChat.

According to an Economic Times report, the homegrown social networking app is reportedly being valued at $600 to $65 million. It is also being reported that the targeted fund raise is $100 million and some of the existing investors in ShareChat, like Xiaomi, Shunwei Capital and Morningside Ventures are likely to make additional investments in the company to cover the remaining amount. HillHouse Capital, a venture capital firm from Hong Kong is another likely investor in the company. There is no confirmation yet on any of these. ShareChat has raised risk capital to the tune of $120 million so far.

ShareChat enjoys a decent customer base among the vernacular language users, but is now coming under pressure from Chinese app ByteDance

The objective behind Twitter making this investment in SharChat also appears to be tapping into this vast market of smartphone users in India. Possibly, the microblogging site is aiming to increase its own user base in India. These sources indicate that Jack Dorsey, the Cofounder of Twitter was himself involved in this investment decision.  It is being touted as the first ever investment by Twitter globally. Its earlier efforts have always been to fully acquire another startup or company, not to make an investment. The ET report also says that China’s Tencent was earlier in the reckoning for making this investment but the talks did not result in a positive way. The funds now raised could be used to retain and build on the existing user base besides winning the battle with ByteDance’s video app TikTok.

In terms of the numbers, Facebook has around 250 million users in India, while Instagram has another 60 million. Twitter has around 30 to 35 million users. There are also plans to monetise the app, going ahead.