The startup has still not finalised which investors will participate in the round, said the source, adding that a deal will take some time to finalise. ShareChat is likely to bring two new investors on board.
ShareChat has been founded by IIT-Kanpur alumni Ankush Sachdeva, Farid Ahsan and Bhanu Singh in October 2015. The startup has raised about $24 million till now and its other investors include SAIF Partners, India Quotient, and Lightspeed Venture Partners.
Its growth has been impressive over the last few months as cheap data has increased the time spent on the internet by users, especially those who are more comfortable in vernacular languages. “In the last two quarters the number of daily active users on the platform has increased from 1 million to 5 million with zero marketing,” said the second source mentioned above.
ShareChat co-founder Ahsan declined to comment when contacted by ET and did not reply to an email query. Tencent, Amazon, Toutiao, Kwai, Hillhouse, DST Global, Morningside, and Naspers did not revert to an email query from ET.
Startup funding up
The company’s funding round comes close on the heels of ET reporting last month that capital deployed across series A, B and C funding into startups surged 73% year-on-year to $850 million in March quarter, and the number of deals rose 30% to 76, show data from Tracxn. This comes as funding at seed stage continues to be slow, but has started to pick up as an overall number of startups increase in the market.
VC investors are moving aggressively to close the deals as they see interest from global strategic investors such as China’s Tencent and Alibaba and South Africa’s Naspers for follow-on investments. Some other companies which are raising capital in quick succession include food delivery application Swiggy.
Several digital media companies which have recently raised funding till now or are in talks to raise funding include Dailyhunt and Newsdog, which have seen interest from Alibaba and Tencent, respectively. Messaging application Hike already counts SoftBank, Tencent, and Foxconn as investors.
Entry into micro markets
The startup is aiming to double its base of daily active users to 10 million and go deeper into micromarkets, including the Northeast region, before it begins working on monetising its service in 2019. The company will look at advertising, influencer marketing and in-app purchases next year.
ShareChat has launched an anonymous chat option, direct messaging and other features to increase user activity.
Over 65% of the company’s user base is made up of people in the 14 to 22 age group, while the rest are older. At present, an average user spends about 17 sessions on the application per week.