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Microblogging giant Twitter is in talks to lead $100 Mn fresh funding round in multi-linguistic social networking app ShareChat, according to people familiar with the matter. Hong Kong based investment firm Hillhouse Capital is also reportedly in talks to participate in the funding round.
Report in Economic Times (ET) claims that Twitter may infuse little more than $50 Mn while the rest will be pumped by existing investors including Xiaomi, Shunwei Capital and Morningside Venture Capital. This upcoming round is most likely to value the Bengaluru based company at $600-650 million. This is a quantum jump from valuation of $450 Mn – $500 during its last funding round in June this year.
If the ongoing investment talks does fructify then this will mark Twitter’s first-ever investment in an Indian startup. But Twitter’s investment won’t be only financial in nature as the microblogging giant may look to leverage ShareChat’s reach in tier 2 and tier 3 Indian cities. This outreach will eventually help the microblogging website in boosting Indian user base that currently is stuck at roughly 30-35 million monthly active users.
Rumors are already rife that there might be integration of ShareChat app into Twitter app after the completion of the funding round. Industry experts claim that ShareChat might help Twitter in breaking its elitist and urban perception and get a breakthrough in creating strong user base in semi-urban and rural areas.
There is indeed a strong ground to believe that millions of internet users spread across India’s hinterland don’t really relate to twitter like its urban counterparts do. However same cannot be said about Facebook and Whatsapp that is rapidly gaining strong traction among India’s rural masses.
ShareChat, on other hand, will equally stand to benefit from fresh capital infusion by Twitter and other investors. It will help to bolster the financial reserves that will help to compete with deep-pocketed ByteDance, whose short video app TikTok is taking Indian market by storm. If grapevines in the industry are to believed then TikTok’s growing popularity has certainly slowed down ShareChat’s user base growth.
Today TIkTok boosts 120 Mn monthly active users across India while ShareChat is well behind with $40 Mn monthly active users.
