New Delhi: India has a new unicorn, and its name is Hike.
Hike Ltd, which runs the messaging app Hike Messenger, on Tuesday said that it has joined the billion-dollar valuation club by raising $175 million largely from Chinese Internet giant Tencent Holdings Ltd and Foxconn Technology Group of Taiwan.
According to the company, its latest round pumps up its valuation to $1.4 billion. It has raised $250 million till date.
Hike becomes the 10th Indian unicorn—a start-up valued at more than $1 billion—alongside e-commerce marketplaces Flipkart Ltd, Snapdeal (Jasper Infotech Pvt. Ltd) and ShopClues (Clues Network Pvt. Ltd), data analytics outsourcing firm Mu Sigma Inc., mobile advertising technology firm InMobi Technologies Pvt. Ltd, payments company Paytm (One97 Communications Ltd), restaurant search service Zomato Media Pvt. Ltd, cab-hailing start-up Ola (ANI Technologies Pvt. Ltd) and online classifieds company Quikr India Pvt. Ltd.
Existing investors Tiger Global, Bharti Enterprises and SoftBank Group also participated in the funding round.
Mint on 8 June first reported that Hike was in talks with Tencent to raise funds as it seeks to catch up with market leader WhatsApp in one of the largest messaging markets in the world.
Chat and messaging in India is largely dominated by Facebook Inc.-owned WhatsApp, followed by Facebook messenger. The simple and clutter-free user Interface has not allowed Tencent’s WeChat messaging app to succeed in the country.
To be sure, WeChat is the largest messaging platform in China, a tightly controlled market where WhatsApp has no presence.
While the fate of WeChat in India is not known, Hike denied there has been talk of a merger or a strategic partnership between the two.
“WeChat did not take off. I think we understand the need to be very local in terms of how to operate; we understand the local nuances…” said Kavin Bharti Mittal, founder and chief executive of Hike Messenger.
Hike does not disclose the number of monthly active users, a number that accurately reflects engagement on a platform.
WhatsApp has about 100 million active users in India.
“We don’t disclose that just yet. We believe that gives us a competitive advantage. If you don’t disclose, people think you are small and that’s a good thing,” said Mittal.
This is Foxconn’s second investment in India after e-commerce marketplace Snapdeal. “People underestimate how good their (Foxconn) software side of business is. Most of it happens on Android and India is an Android market,” said Mittal.
Hike will use the money to expand its 250-strong team, improve the product, invest in machine learning, even explore acquisitions in the artificial intelligence and technology space, he added.
“…we have been tinkering with some stuff but now we can double down.”
Within a year of its launch in late 2012, Hike became one of the most popular messaging apps in India. Over the past two years, though, it has been overtaken by Facebook.
According to a study by research firm TNS, released in October, WhatsApp emerged as the most popular messaging app among Indian Internet users, followed by Facebook Messenger. While the survey isn’t definitive—its sample size was only 5,306—there’s little doubt that WhatsApp is currently the most popular messaging app in the country.
Hike, which was launched in December 2012 by Mittal, son of billionaire entrepreneur Sunil Mittal, chairman of Bharti Enterprises, has said that Hike Messenger has more than 100 million users, of which more than 90% are in India.
Hike launched its games offering in March. Tencent, too, has a portfolio of games, commerce, content and messaging apps.
The investment by Tencent and Foxconn in Hike could be about doing something to “break the monopoly” (of Facebook), said Vishal Tripathi, research director at Gartner Inc. He pointed out that WeChat, itself a monopoly in China, and which has been used successfully as an enterprise application in that country, could transfer several learnings to Hike.