India is a diverse country with over 30 languages and over 1600 dialects. According to KPMG, Indian language Internet users are expected to grow at a CAGR of 18% to 536 million or nearly 75% of the Internet base in 2021. It is this untapped market that Indian social media platform ShareChat caters to.
ShareChat was founded in 2015 by IIT Kanpur graduates Farid Ahsan, Bhanu Singh, and Ankush Sachdeva. The trio met at a hackathon and went through 14 failure experiments including a real estate portal, a crowdsourcing platform, and a civic data platform. Their experiments led to a debating platform called Opinio that was similar to Reddit. They had 32,000 signups for a chat fight on the top Khan in Bollywood but they realized that people wanted to debate in their local language rather than English.
This was also the during the timeframe when falling prices of low-end Android smartphones and the launch of Jio and its free data push led to a surge in mobile Internet users in India. WhatsApp was already a rage but there was not much content in local languages.
In December 2014, the first version of ShareChat was launched as a chat app in 10 languages including English. The level of engagement in English was low, so they scrapped English and relaunched ShareChat in October 2015. They also included a user generated content system.
Today, ShareChat has 30 million users across 14 Indian languages including Hindi, Telugu, Bengali, Tamil, Marathi, Gujarati, Punjabi, Malayalam, Kannada, Odia, Bhojpuri, Rajasthani, Haryanvi, and Assamese. About 92% of its users come from Tier-II and Tier-III cities.
A user can select their language and access content on various topics like Entertainment, News, Fashion, Religion, and Love. ShareChat also helps identify users with similar interests and help them connect over private chats. It is a combination of Twitter, Facebook, and Instagram and users can share the news, jokes, couplets, songs, and videos from ShareChat on other messaging apps like WhatsApp.
The app is also being used increasingly by politicians. To address concerns over fake news and objectionable content, the platform tracks down the phone number of the user and can even block the device. It recently blocked 50,000 such accounts. To repost, the user would have to get a new number and a new device.
ShareChat does not have any operational revenues. Its gross revenues increased 14 times to INR 78.4 lakh ($0.1 million) in FY 2016-17. Gross expenditure increased four times to INR 10.38 crore ($1.4 million) in 2016-17 mainly due to surge in employee-related expenses and administrative overheads. Net losses also quadrupled to INR 9.59 crore ($1.3 million) in 2016-17. ShareChat currently has 100 employees from 21 states.
ShareChat has so far raised $122.8 million from investors including India Quotient, Venture Highway, Morningside Venture Capital, Jesmond Holdings, Lightspeed Venture Partners, Shunwei Capital, Xiaomi, and SAIF Partners. It last raised INR 720 crore ($102 million) in September 2018 at a valuation of $460 million. In an earlier round in December 2017, it had raised $4 million at a valuation of $67 million.
ShareChat competes with WhatsApp, which has over 200 million monthly active users in India. ShareChat wants to expand its chat platform to include micropayments, education, and other types of entertainment.
ShareChat plans to grow its user base to 100 million within a year. It plans to monetize its user base after a couple of years after it has developed a sticky audience. However, the skyrocketing valuation is a cause for worry that could cause undue pressure on the startup. The gap between funding and revenue is very high at the moment, so if at some point investors lose confidence, the company would be left high and dry.
Photo Credit: BANITAtour on Pixabay