ShareChat, an Indian social network that focuses entirely on serving users in non-English languages, said on Thursday it has raised $40 million from a clutch of investors after the Indian startup added tens of millions of new users in recent months.
The five-year-old Bangalore-based startup said Dr. Pawan Munjal, chief executive and chairman of giant two-wheeler manufacturer Hero MotoCorp, Ajay Shridhar Shriram, chairman of chemical manufacturing company DCM Shriram, and existing investors Twitter, SAIF Partners, Lightspeed Ventures and India Quotient financed the new round of capital.
Ankush Sachdeva, co-founder and chief executive of ShareChat, told TechCrunch in an interview that the startup’s new fundraise is its "pre-Series E" financing round. TechCrunch understands the startup is engaging with several major VC funds and corporate giants to raise more than $100 million in the next few months. ShareChat has raised about $264 million to date.
The new capital will help ShareChat better support creators on its platform, Sachdeva said. ShareChat launched the short-video app Moj in early July, days after New Delhi banned TikTok, which at the time had about 200 million users in India.
In the weeks following TikTok’s ban in India, scores of startups have launched short-video apps in the country. DailyHunt has launched Josh, and Times Internet’s MX Player has launched TakaTak. But Moj has clearly established dominance1 among short-form video apps.
ShareChat said Moj has amassed more than 80 million monthly active users, who are spending about 34 minutes on the platform each day.
ShareChat’s marquee and eponymous app, which caters to users in 15 Indian languages, itself has grown "exponentially." The app has amassed 160 million monthly active users 2, up from 60 million during the same period last year. A user on an average spends about 31 minutes on the app each day, the startup said.
"ShareChat has grown phenomenally this calendar year," said Sachdeva. The growth of ShareChat in the social media category is a rare success story for the Indian startup ecosystem.
"India could never have dreamt of having a homegrown social media platform, had ShareChat not embarked on the impossible in 2015. ShareChat’s success has given immense hope to India’s startup fraternity, and motivated entrepreneurs to take audacious bets in India’s internet ecosystem," said Madhukar Sinha, partner at India Quotient, one of the earliest backers of ShareChat.
In yet another move that is not very common among Indian startups, ShareChat announced earlier this week that it was adding $14 million to its employee stock ownership plan (ESOP), taking the total to $35 million.
Sachdeva said that for a startup of ShareChat's scale, it is crucial that its employees feel valued, because there are enough other giants in the market looking for similar talent. "Our biggest competitors are global peers from the U.S. and Beijing," he said.
The new capital will also help the startup further invest in its AI prowess and build new products and establish deeper partnerships with music labels, Sachdeva said. TechCrunch reported earlier this year that ShareChat had quietly launched a fantasy sports app called Jeet11.
Sachdeva said Jeet11 is gaining good traction and the startup's foray into fantasy sports and short-video app categories demonstrates how fast it moves.
ShareChat has also been working with advertisers as it solidifies its monetization avenues, he said. "The brands are loving the fact that they can engage very strongly with users," he said.
The startup is also thinking about expanding outside of India, though such plans are in an early stage, he said. A fraction of ShareChat's users today already live outside of India. The app has attracted many users of Indian diaspora, he said.
"To our amazement, the first version of Sharechat app was created in just a few days of beanbags and Red Bull in our office. And five years later they have done the same with Moj. As a new era unfolds with Moj, we are yet again solidly behind this team to support them. We believe Moj is designed for bigger success and will succeed across India, and beyond India in the years to come,” said India Quotient's Sinha.
1 Instagram reaches about 150 million monthly active users in India, but it's unclear if more than half of the app's userbase has embraced Reels yet.
2 Many players in the industry rely on mobile insight firm AppAnnie and Sensor Tower to track the performance of their apps, their portfolio startups’ apps, and those of their competitors. We often cite AppAnnie and Sensor Tower data, too.
According to AppAnnie, ShareChat had fewer than 20 million monthly active users in India last month. Startup founders and other tech executives with whom TechCrunch has spoken say that AppAnnie’s data is usually very reliable, and I can tell you that most of the figures companies claim publicly match what you see on AppAnnie’s dashboard.
But another thing I have heard from many startup founders is that AppAnnie’s data often misses the mark for apps that have a significant portion of their user base in smaller cities and towns -- as is the case with ShareChat.
I asked Sachdeva about it, and he said that ShareChat and many other apps that are popular in smaller Indian cities have not integrated AppAnnie’s SDK into their apps. AppAnnie relies on developers integrating its SDK into their apps to be able to assess the performance of that app and others installed on the handset.
This would explain why AppAnnie estimates that WhatsApp, which claims to have over 400 million users in India and is also popular among users in smaller Indian cities and towns and villages, has about 330 million users.
The contrast between the numbers ShareChat has officially shared and what one of the most reliable and widely used third-party firms offers was too significant, and I thought I should mention this. (An industry executive shared AppAnnie's figures with TechCrunch.)