India's ShareChat closes $520m round, hits $5b valuation

A USD 266m tranche led by Alkeon Capital came in December with support from Temasek, HarbourVest Partners, Moore Strategic Ventures, India Quotient, and various unnamed investors from the US.

The company was valued at USD 3bn as recently as July last year, when Temasek, Moore, and Mirae Asset Global Investments led a USD 145m Series F. It has raised about USD 1.2bn since the beginning of 2021 alone.

Early-stage investor India Quotient was the first institutional backer in 2015, according to AVCJ Research. Other significant investors include Lightspeed Venture Partners and Tiger Global Management, as well as strategics the likes of Twitter, Xiaomi, and Snap, the US messaging app formerly known as Snapchat.

ShareChat is India’s largest homegrown social media company and one of the flagbearers of a burgeoning domestic digital consumer media landscape. It positions itself as the largest “content ecosystem” locally. Local languages are a strong focus. There is no English service.

The model is diversified, with revenue generated from a horizontal platform covering several media categories and leveraging various advertising, video commerce, and virtual gifting channels. Virtual gifting is said to be experiencing particularly strong growth, with the business line set to double its current annual revenue run rate of USD 50m by year-end.

Short-video is the company’s strongest category. This is an area where several Indian apps have benefited from China’s Tiktok exiting India amid tensions between Beijing and New Delhi. ShareChat’s key assets in this space are Moj, an in-house developed product, and TakaTak, which was acquired last February. Together they cater to more than 400m users.

Moj was quickly scrambled to fill the Tiktok void in 2020, with ShareChat CEO Ankush Sachdeva claiming it was built within 30 hours.

Moj has scaled rapidly thanks to its artificial intelligence (AI) content recommendation system, also known as a ranking and relevance system. This is said to allow it to personalise content feeds more efficiently than apps that simply rely on inputs created by user actions such as “friending” or “following” other accounts.

ShareChat invested heavily in technical talent for the app, expanding its AI team to include units across India, the US, Russia, and several European countries. “We figured that being India’s best means nothing because you still have to compete with the Western tech companies, and they’re getting great talent pools out of Silicon Valley,” Sachdeva told AVCJ earlier this year.

“We realised we had to expand our talent pool outside of India for ranking and relevance because it’s a very niche AI job family. And we were remote anyway thanks to COVID and lockdowns. That is probably one of the most significant decisions we made as a company, and today I think we are far ahead of the local competition in terms of our ranking and relevance capabilities.”

Moj is said to have more than 3x the number of daily active users as its closest competitor and more ex the amount of daily time spent per user. Its additional functions include an in-app chat feature. In 2020, ShareChat launched an audio chatrooms feature, which it says has become one of largest “voice-based live hangouts” with some 2bn minutes of audio streamed every month.

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• Topics
• South Asia
• Media
• Technology
• Expansion
• India
• Google
• Temasek Holdings
• Alkeon Capital Management
• HarbourVest Partners
• India Quotient
• TMT