Vernacular social networking platform ShareChat is in the final stages of raising Rs 120 crore ($18 million) from Chinese smartphone manufacturer Xiaomi and its founder Lei Jun's venture capital fund Shunwei Capital, a report in a national daily stated.
The term sheet was signed a few weeks ago and the investment should formally close soon, The Times of India stated, citing a person aware of the matter. The deal is likely to value the two-year-old social network at about Rs 400-500 crore, the newspaper cited another individual as saying.
Xiaomi and ShareChat did not respond to e-mail queries from VCCircle, seeking confirmation.
In November 2016, ShareChat, a regional language social networking app operated by Mohalla Tech Pvt. Ltd, raised $4 million (Rs 27.5 crore) in a Series A round of funding led by Lightspeed India Partners. The round also saw participation from existing investors SAIF Partners and India Quotient, as well as from Delhi-based early-stage venture capital firm Venture Highway.
In October 2015, it had raised $1.35 million from SAIF Partners and India Quotient. ShareChat was also one among several startups selected by Google for its accelerator programme last year. As part of the programme, the firm received $50,000 in equity-free seed funding.
ShareChat was founded in 2015 by IIT Kanpur alumni Farid Ahsan, Ankush Sachdeva, and Bhanu Singh. It allows users to create, discover and share content such as videos, jokes, audio songs and images. The Android app, which shows around 2 lakh downloads on the Google Play Store, is available in multiple Indian languages—Hindi, Telugu, Malayalam, Marathi, Gujarati, Punjabi, Tamil, and Bengali.
Shunwei Capital, which invests in mobile Internet, Internet of things, and tech companies, was keen on investing in Indian startups, in partnership with domestic VC firms. The Chinese VC firm had closed its third fund in July 2015 with a capital commitment of $1 billion.
In April this year, Shunwei Capital, along with Accel Partners invested Rs 25.5 crore (around $3.8 million) as part of a Series A round in a gaming startup Mech Mocha.
In February this year, Shunwei had invested $3 million in Mumbai-based Truebil, a marketplace for pre-owned cars.
Xiaomi Inc. made its first publicly-disclosed investment in India in April 2016. It had led a $25-million round in online entertainment company Hungama Digital Media Entertainment as part of its strategy to introduce local content on its smartphones.
"We want to invest in companies that can help us improve our mobile and software experience, and whose services we can integrate into our phones to provide a superlative experience. So, we would be investing in many more companies in the next few years," Manu Jain, Xiaomi India head told VCCircle in an interaction in May this year.