Messaging app Hike Ltd has raised $175 million (Rs 1,170 crore) from China’s Tencent Holdings Ltd, Taiwan’s Foxconn Technology Group and other investors in a round that propelled it to the elite list of unicorns, or private companies valued at least $1 billion.
Existing investors Tiger Global, Japan’s SoftBank Group Corp and India’s Bharti Enterprises also took part in the Series D round that values Hike around $1.4 billion, the company said in a statement on Tuesday. This is the fourth funding round for Hike and takes the total it has raised so far to $250 million, the company said.
“The new fundraise will allow us to invest in areas that will be key to our long-term vision and success,” said Kavin Bharti Mittal, founder and CEO, Hike. “We will invest in services, people, office space, AI (artificial intelligence), machine learning, augmented reality/virtual reality, and to make more efficient bets.”
The funding round is one of the largest by an Indian tech startup this year and makes Hike the 10th Indian unicorn. Other Indian companies in the unicorn club are e-tailers Flipkart, Snapdeal and Shopclues, cab aggregator Ola, mobile wallet and e-commerce firm Paytm, food-tech venture Zomato, analytics firm Mu Sigma, mobile ad network InMobi, used-goods marketplace Quikr.
Hike was founded in 2012 by Kavin, son of Bharti Enterprises chairman Sunil Bharti Mittal. It has grown rapidly and competes with Facebook-owned WhatsApp Inc. and Tencent’s WeChat as well as Viber, Nimbuzz and Japan’s Line in India.
“Hike deeply understands India a highly diverse market with many nuances. It’s on a mission synergistic to ours, which is to enhance the quality of human life through Internet services,” said Martin Lau, president at Tencent, explaining the rationale for the Chinese firm’s investment in the Indian company.
Calvin Chih, CEO of Foxconn unit FIH Mobile, said messaging platforms have significant investment potential, particularly in a market like India, where most people will access the Internet for the first time on their mobile phones.
SoftBank chairman Masayoshi Son added that Hike is one of the Japanese telecom and Internet conglomerate’s best-performing portfolio companies in India. “The team has reached an outstanding scale in a short span of 3.5 years,” he said.
For SoftBank, this is the first major investment in an Indian company since the departure in June of its president and chief operating officer Nikesh Arora. The India-born executive, once considered as the heir apparent to Son, had led SoftBank’s investments in India for the past couple of years including in companies such as online retailer Snapdeal and cab aggregator Ola.
Hike, backed by a joint venture between Bharti Enterprises and SoftBank, is a peer-to-peer messaging app that uses both data and SMS to deliver messages. Its biggest competitor in India is WhatsApp, which has a 56% market share, according to market research firm TNS. Tencent had launched WeChat in India in 2012 but the app didn’t gain popularity in the country due to tough competition from WhatsApp.
Tencent’s investment could help Hike gain from the experience of China’s biggest messaging app. On its part, Tencent, which has identified India as a key growth market but failed to get any traction through WeChat, could leverage Hike to gain some market share in the country.
Hike claims it has 100 million users—95% of them are in India—and transacts 40 billion messages a month. The Hike platform supports multiple languages, including English, Tamil, Hindi, Malayalam, Gujarati and Bengali.
For Hike, this the second funding round this year. It had raised an undisclosed amount in funding from Quora founder Adam D’Angelo, WordPress founder Matt Mullenweg, and senior Dropbox executives Aditya Agarwal and Ruchi Sanghvi in January.
The company has been releasing several new features to attract users. Last year, it launched a new feature to allow users to share files without an Internet connection in a 100-metre radius. It has also introduced features such as Hindi news bytes, stickers in 30 languages, games, group calling, group chat for up to 500 members and 100 MB file sharing.
Like this report? Sign up for our daily newsletter to get our top reports.