India’s WhatsApp rival Hike raises $175M led by Tencent at a $1.4B valuation

India has a brand new tech unicorn. Hike, a four-12 months-outdated messaging app, nowadays introduced that it has closed $ one hundred seventy five million in funding led by using new investors chinese language internet large Tencent and manufacturing firm Foxconn. The series D spherical values the company at $ 1.four billion, founder and CEO Kavin Bharti Mittal verified to TechCrunch.

Tencent, the corporate that pioneered messaging with WeChat, is the big name here, however current traders Tiger international, Bharti and SoftBank also took phase in the round, which takes Hike to greater than $ 250 million raised up to now. Hike brought some strategic U.S.-primarily based traders to its roster earlier this 12 months, but its last major funding used to be a $ sixty five million series C that closed two years ago.

“Hike deeply understands India; a extremely various market with many nuances. it is on a mission synergistic to ours, which is to reinforce the quality of human existence via internet services. With our funding, Hike will be able to leverage our deep domain expertise in the messaging platform area to offer extra value to its customers in India,” Tencent President Martin Lau said in a prepared observation.

Rivaling WhatsApp

Born out of a joint-project between Bharti and SoftBank, Hike includes standard messaging app features you’d predict, alongside free voice calling and some other twists. It has put emphasis on local customers with features that embody a privacy strategy to conceal chat messages, in case a nosey relative will get grasp of your phone as can occur in India, and the ability to send messages by the use of SMS to friends who aren’t using the Hike app, any other foreseeable usecase within the country.

targeting young individuals, it has performed up to a enjoyable and hip image with its advertising and marketing and merchandising campaigns.

There’s an enormous problem though.

facebook-owned WhatsApp is the dominant chat app in India, with more than 100 million energetic users within the u . s . a ., around one-tenth of its complete userbase. Hike announced prior this 12 months that it has over 100 million registered customers (i.e. downloads now not necessary lively), 90 percent of whom are aged under 30, with 40 billion messages exchanged on the service every month, however Bharti Mittal declined to provide an replace on that information.

despite WhatsApp dominating chat international, the Hike chief is bound that his company’s app is pleasing a so much-needed hole.

“each market has two messaging apps that do smartly,” he stated in an interview with TechCrunch. “There’s one who replaces SMS and one who does much more than that. Hike doesn’t even compete with WhatsApp as of late, it is used very actively along with other apps.”

For the past yr or so, Hike has been thinking about constructing in that differentiation with WhatsApp which, regardless of adding voice calls final year and promising to introduce trade money owed at some point, has generally retained a naked-basics option to chat. That has enabled individuals of all backgrounds and comfort with expertise to undertake WhatsApp — which noticed its message volumes cross global SMS numbers way back — however it has left an option for a extra built-in and sophisticated messaging app — something that acts like a brand new day internet portal for cell.

Seizing that opportunity, which Bharti Mittal believes lies with the youth, Hike has integrated mobile video games, a news carrier, coupons (beta) and localized stickers into Hike. video games appeal to over one hundred million play periods per month — 20-25 million per day — whereas the news characteristic has 50 million-plus users and sees 1.5 billion stories viewed a month, he said of the early indicators of traction.

newest Crunch record

Hike’s registered person increase

moving into services and products

That approach to going past chat makes the involvement of Tencent in this round hugely necessary. The chinese language firm pioneered the ‘swiss army knife’ approach to messaging with WeChat, China’s dominant messaging app with over seven hundred million users which has integrated e-commerce, meals supply, taxi apps and rather more. WeChat is frequently compared to a cellular working machine such is its affect and significance in China.

The WeChat influence is robust. Even fb is among those to embody its method with Messenger and, like the U.S. social network large, that’s the path Hike goals to go down.

Bharti Mittal, whose billionaire father Sunil Bharti Mittal founded telecom giant Bharti, explained that to me Hike is likely to introduce a fee resolution inside the subsequent six to 12 months, among different issues.

“that is the very early form of what is imaginable, you’ll see us make investments more in services and products going forward,” he introduced.

Tencent has invested in other messaging apps, Snapchat and Kik within the U.S., but its deal with Hike is impressive for being its biggest investment in India so far. (It led a $ ninety million funding into Bangalore-based clinical portal Practo final yr.) Given the point of interest that Alibaba, Tencent’s fierce rival, is placing into India with investments in Paytm (funds) and Snapdeal (e-commerce), you want to be forgiven for seeing the Hike deal as Tencent’s first move to replicate its chat-based empire in India, the planet’s different billion-particular person-plus inhabitants.

not so. This isn’t the prelude to an acquisition, according to Bharti Mittal.

“Operationally nothing modifications, there’s no dialogue around integration,” he defined. “Tencent has a minority stake… our purpose is to make the partnership a key success, [there’s] no-one better than Tencent as a result of they are the perfect at what they do.”

the truth that WeChat has largely failed in India, despite Tencent striking some critical cash into advertising the app by the use of advertisements and partnerships a couple of years in the past, nullifies the complication of any competitors, the Hike CEO mentioned.

“WeChat just isn’t as so much of a competitor nowadays, and that i think they’ve viewed that,” he introduced. “We spoke to them very early on once they came to India to work on their very own product, [but] it was too early to take a position [then] and so they needed to [work by] themselves. [The investment today] happened as we constructed a relationship over the last few years.”

Tencent is the standout name within the collection D round, however Bharti Mittal additionally played up the importance of Foxconn, some other massively influential Asian tech firm that is taking a look to put roots in India.

apart from setting up manufacturing capabilities within the country, which may soon embody iPhone production, Foxconn has made investments, including Snapdeal alongside Alibaba and it reportedly additionally having a look at Paytm.

Bhatti Mittal validated that Hike will seem to be to use its relationship with the Taiwanese manufacturing massive to pre-bundle its app on Foxconn’s own-model price range Android devices. past distribution, he argued that the startup can analyze so much about how folks use their gadgets from Foxconn.

“Foxconn has lot of deep analysis about how we will build our services and products on Android,” he stated. “India is a superb market however we aren’t as exposed [to insights] as those in China.”

India’s cell revolution is solely getting started

normally, Bharti Mittal is upbeat concerning the future, and he regularly explained that the internet and cellular are still of their infancy in India.

“The very massive niche that we’ve coated is handiest going to get greater as a result of 500 million more persons are coming online in India,” he stated. “The direction will look very completely different to the present market and what Hike has been these previous few years. For the first time ever in India, we’re seeing 2G utilization decline with 3G and 4G on the upward thrust. The internet can be extra pervasive and the market can trade utterly.”

in the line with that, he printed that Hike will probably be growing its investment in video, native content material, augmented fact and computer finding out. the corporate will even check where it fits in with VR, AR and different rising technologies.

“As a chat app, now we have to remember people neatly, we need to take into account our users so much, significantly better,” Bharti Mittal said.

Hike founder and CEO Kavin Bharti Mittal

India’s present tech unicorns are in the e-commerce space, and those corporations themselves began out to fill a void that existed prior to Amazon brought its trade — and billions of dollars in investment capital — to Indian shores.

With Hike, we’re seeing the first billion-greenback social firm in India, which Bharti Mittal is unsurprisingly very bullish about.

“Even though the [Indian] funding market has cooled, this deal goes to point out that the messaging and social areas are so strong that after somebody breaks in, it can give a huge advantage over everybody else,” he mirrored.