Though ShareChat doesn’t have a revenue model in place yet, it claims to have 1.3 million daily active users and 4.2 million monthly active users.

Vernacular social networking app ShareChat to raise Rs 120 cr from Xiaomi Shunwei Capital
Atom Fund Raising Friday, September 29, 2017 - 09:46
Written by  S. Mahadevan

Some Chinese investors appear to be bullish about the Indian market, particularly where there is a trade-off, with some benefit accruing to them, directly or indirectly. The investment by Xiaomi and Shuwei Capital owned by Xiaomi’s founder, Lei Jun, in a Bangalor- based startup, ShareChat could be a case in point.

As per a report in Times Of India, the proposed Rs 120 crore funding is said to be in its final stages and may be announced in a few days.

ShareChat is in an unusual business since it runs a social media networking site in different Indian languages but has no place for English. But its app, meant for Android based devices appears to be doing quite well. The reason ShareChat is being looked at closely by prospective investors is that the app claims to have 1.3 million daily active users and 4.2 million monthly active users. This does sound quite attractive; however, the startup does not have a revenue model in place yet.

The founder is a young graduate of IIT and the immediate target is to scale up the user numbers and then look at some precedence to emulate. The example of WeChat of China could be followed, with adaptations for local conditions.

ShareChat has carefully avoided the major city users and since, in any case it serves only the local language users, a majority of their active users come from Tier 2 and Tier 3 towns and that is where they will focus in the coming weeks and months as well.

The logic ShareChat is offering is also convincing. According to them, the availability of entry level smartphones at affordable prices has helped bring a very large part of the population into the online platform and the social media platform they are offering in vernacular languages is definitely a huge attraction. And they can tap the smaller businesses servicing these towns to take positions on their app and that can bring in the revenues.      

It may be pertinent here, that WhatsApp, with a 200million strong subscriber base in India is planning to introduce transactions on its Indian arm, possibly on an experimental basis, since it is not happening anywhere else.