India's ShareChat raises $502m at $2.1b valuation

Lightspeed Venture Partners and India Quotient also participated, as did US messaging giants Twitter and Snap, formerly known as Snapchat. It more than triples the start-up's valuation versus last year, when a pre-Series E commitment of $40 million was reportedly transacted at a valuation of less than $700 million.

ShareChat was set up in 2015 and has more than doubled its number of monthly active users every year since 2016 to 120 million currently. The company's core differentiator is that it provides messaging and media services in 15 of India's vernacular languages, and there is no service in English. One of the more popular use-cases is the sharing of shayaris, a class of traditional Indic-language poetry now trending online as source material for valentines and inspirational quotes.

The latest growth spurt was triggered in mid-2020, when political tensions over a Himalayan border skirmish led the Indian government to ban 59 apps with links to China, including short-video leader Tiktok, which had 200 million users in the country. This precipitated a spate of investment in local short-video start-ups and a quickly scrambled expansion by ShareChat. According to CEO and co-founder Ankush Sachdeva, the company built its Moj video app within 30 hours.

"When we saw a large vacuum emerge on June 29 with a lot of short-video apps exiting the market — we knew this opportunity was for us," Sachdeva said in a statement. "There were millions of short-video creators already trained for creating that content supply. The real game was therefore going to be on building the most relevant feed for the user and we were the only Indian company that had built a world-class feed recommendation system for short-form content."

Sachdeva said Moj was expected to help ShareChat achieve a network of one billion monthly active users, although he did not specify the timeframe. Much of the confidence is based on the idea that Moj uses artificial intelligence (AI) to generate content recommendations for users rather than simply relying on inputs created by user actions such as "friending" or "following" other accounts. This is said to personalize content feeds more efficiently.

The AI approach involves multimodal machine learning, which processes visual, audio, and text data to match posts to sets of users while also addressing trust and safety concerns around spam and offensive content. ShareChat claims Moj's deployment of these techniques has given it a 50% higher retention rate and twice the number of daily active users compared to its closest competitor. ShareChat and Moj have a combined user base of 280 million.

The Series E brings ShareChat's total funds raised to $766 million. Twitter and TrustBridge Partners led a $100 million round in 2019 that featured Lightspeed, SAIF, India Quotient, Shunwei Capital, and Morningside Ventures. Chinese smart phone maker Xiaomi led a $100 million round in 2018. Earlier investors include VH Capital, an affiliate of Venture Highway, and Jesmond Holdings, an entity reportedly connected to DST Global.

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• Topics
• South Asia
• Media
• Expansion
• Technology
• India
• Tiger Global Management
• Lightspeed Venture Partners
• India Quotient
• TMT