ShareChat

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ShareChat

Developer(s)	Mohalla Tech Private Limited
Initial release	October 2015 (2015-10)
Stable release(s)
emarti_8.6.2
Engine
Operating system	iOS, Android
Size	32.8 MB (iOS) 9.7 MB (Android)
Type	social media and Instant messaging
Licence	Freeware
Website	sharechat.com

Search ShareChat on Amazon.

ShareChat is an Indian social media startup and is one of India’s largest homegrown social media networks. It was incorporated by Mohalla Tech Pvt Ltd on 8 January 2015, and offers the content consumption and sharing platform only in Indian vernacular languages to cater to over 1.17 billion wireless network users of India. As of Q4 2018, ShareChat has over 40 million monthly active users. After its last funding round in September 2018, ShareChat was valued at $460 million.

The languages that ShareChat is available to users are Hindi, Gujarati, Tamil, Punjabi, Marathi, Malayalam, Telugu, Bengali, Kannada, Odia, Assamese, Bhojpuri, Haryanvi and Rajasthani. Owing to its regional language of operation and layout, ShareChat’s content sees over 1 billion shares every month on WhatsApp. As per documents filed during its last funding round, ShareChat is seeking a valuation of $2 billion before it files an IPO. During the 2019 Indian general elections, it has been noted as one of the most relevant and important social media platforms and has been marked by the Election Commission of India to fight the issue of fake news alongside Facebook, Twitter and Google.

In March 2019, ShareChat acquired Clip, a fellow homegrown social media application that had over 5 million monthly active users (MAU) at the time of acquisition. The takeover was executed at an undisclosed amount, and post takeover, Clip’s operations have been allowed to run independently.

As of now, ShareChat is available only in India, and cannot be officially accessed by Indians residing outside the country.

Foundation and History

ShareChat’s holding company, Mohalla Tech Pvt Ltd, was incorporated in January 2015 by three IIT Kanpur graduates — Ankush Sachdeva, Farid Ahsan and Bhanu Pratap Singh. The company is headquartered in Bengaluru, Karnataka, and presently employs close to 130 people as of March 2019.

Prior to the formation of the company, Sachdeva, Ahsan and Singh realized the potential of vernacular content in India while working on some of their previous ventures. They created WhatsApp groups to share such content in order to gauge user interest for such a service. These groups were similar to chat bots where users would sign up to get a particular type of content that is to their liking. This gave the founders ground testing for a dedicated vernacular language platform. In October 2015, after a year of testing market demands for a vernacular language social medium in India, ShareChat was launched for the public as a content sharing platform.

Initially, ShareChat primarily worked as a content sharing platform, without any scope of users generating their own content. Even private and group messaging features were initially not included. In April 2016, ShareChat enabled user-generated content creation on its platform, allowing its users to share their own posters and creative content. This was eventually expanded to cover video content as well, when ShareChat Talkies was also introduced in February 2018. At around the same time, it also introduced open tagging for users, which would allow anyone to create their own hashtags depending on the content.

By this time, ShareChat had over 10 million MAUs, with over 500,000 shares of content from its platform on WhatsApp alone. Its user-generated content started seeing heavy demand by then, with over 100,000 unique content pieces being posted on its platform every day. Prior to this, in December 2016, ShareChat raised $4 million in Series A funding, followed by a Series B funding round where they raised a further $18.2 million, and was valued at $67 million post this. In September 2018, as per documents filed with the Indian Registrar of Companies, ShareChat raised another $99.85 million in its third round, Series C funding. Post funding, ShareChat’s valuation grew seven times, to stand at $460 million.

This phase, between Series A and Series C, also coincided with the time when ShareChat saw its strongest growth phase, seeing 20% month-on-month growth in user base to register approximately 30 million MAUs. This period also happened to be the phase when Indian language content and social media platforms started getting widespread attention from all corners, including users, political bodies, regional organizations and foreign companies that wanted a share of the rapidly growing sector.

With the expansion of its user base, services and features, ShareChat also expanded to iOS devices in late 2018. Until then, it could only be accessed via Android devices with all features, and as a more stripped-down version through web browsers on PC. The company is also developing its own neural network model with its data science team, which it uses for content recommendation and filtering of objectionable content, as well as building its user-specific ‘Trending’ news feed on its app.

As of March 2019, the key people at the hierarchy of ShareChat include Ankush Sachdeva (co-founder and Chief Executive Officer), Farid Ahsan (co-founder and Chief Operating Officer), Bhanu Pratap Singh (co-founder and Chief Technical Officer) and Sunil Kamath (Chief Business Officer). All of the co-founders featured in Forbes’ 30 under 30 Asia 2018, having been recognized for their work with the vernacular social media platform.

Legal battle and Acquisition

The ByteDance face-off

In late 2018, ShareChat started seeing increasing competition from Chinese upstart ByteDance’s social media services, TikTok and Helo. In September 2018, ShareChat filed a lawsuit against ByteDance, accusing its Helo platform of unfair practices, copyright infringement and blatant cloning of the ShareChat interface. On 30 October 2018, the Delhi High Court ruled that ByteDance was indeed infringing unlawfully upon ShareChat’s intellectual properties.

As an aftermath, ByteDance was found guilty of bidding on the ‘ShareChat’ keyword on Google AdWords, which is a way of promoting a service based on trending user search phrases. Google was instructed by the Delhi HC to deactivate such unfair keyword bidding, despite Google having stated that such practices are, in fact, quite common among technology companies. ByteDance was further instructed to alter its app description on the app store, where its description for Helo prior to the lawsuit stated ‘Share & Chat’. The updated description was changed to ‘Share, Follow & Chat’.

In response, ByteDance complied with all court instructions, and released a statement claiming to be fully compliant with all local laws and regulations. ShareChat continues to enjoy a higher number of active users on its users, presently standing at around 45 million MAUs, in comparison to Helo’s 20 million MAUs.

Clip acquisition

On 2 March 2019, Mohalla Tech acquired Transversal Tech-owned short video sharing platform, Clip, for an undisclosed amount. Prior to the acquisition, Clip had nearly 10 million MAUs on its platform, providing a vernacular language video platform that catered majorly to the Tier II cities and beyond. Post acquisition, while Clip’s management kept functioning independently, the app was merged with ShareChat, and fused into ShareChat’s own video sharing platform. This has generated mixed reviews from users on the Google Play Store, particularly from users who were previously signed up with Clip but not ShareChat.

Funding and Investors

ShareChat’s initial, seed-round funding was announced on 13 July 2016, with SAIF Partners and India Quotient providing $1.35 million funding to the social media startup. Approximately four months later, a Series A funding drive saw the platform raise a further sum of $4 million from Lightspeed India Partners and Venture Highway, alongside its existing backers. The Series A drive was announced on November 23, 2016.

A bigger funding drive came with its Series B round, where it raised an additional $18.2 million, announced on 18 January 2018. Chinese smartphone giant Xiaomi, and its sister concern Shunwei Capital were the new investors in this round, while all four previously existing investors also participated.

ShareChat’s biggest funding came with its Series C funding, announced by the Registrar on 19 September, 2018. At $99.85 million, the prime investors of this round was Shunwei Capital, while Xiaomi, Lightspeed India and SAIF Partners also invested additional amounts. Furthermore, the Series C funding round saw the entry of two new financial backers — China’s Morningside Ventures, and Yuri Milner’s DST Global-affiliated venture capital firm, Jesmond Holdings.

As of March 2019, ShareChat was said to be in talks for a new series of funding, with target funding of $200 million. The company is said to be in talks with Chinese powerhouse Tencent Global as one of its prime potential investors. The move is seen as a potential way to counter the rising threat of ByteDance in India, which is backed by Japan’s venture capital powerhouse Softbank Group and others, and is presently the world’s highest valued internet startup.

With the new potential investment, ShareChat is seeking a valuation of around $700 million. However, the company still stands some distance away from an IPO, and is looking at an overall valuation of $2 billion before it goes public and decides to monetise its services.

Features

App features

As of March 2019, ShareChat’s key features through the app include text updates, posting user-owned posters and videos, original content watermarking, private messaging, liking, commenting, sharing (including as links to other platforms/apps), Create Your Own Stickers, and Shake-N-Chat.

User-owned content is popular among ShareChat’s users, where its users make their own posters and videos, and the same is posted along with an original content watermark that leads back to the original user. As a result, the content creator is always credited with creating a particular piece of content. Many ShareChat users are drawn to the platform because of this feature, and consider themselves to be building a ‘fan following’ for themselves.

Shake-N-Chat mimics the format of a chat room, such as ChatRoulette. With Shake-N-Chat, users wishing to communicate with strangers will be connected with a fellow user that has similar interests in politics, sports, music or other genres. Despite the possibility of giving out private numbers, Shake-N-Chat remains a largely popular feature among ShareChat’s users.

ShareChat Talkies

With over 30% of the content on ShareChat’s platform being videos, ShareChat launched ShareChat Talkies as the company’s official original content streaming and production arm. With ShareChat Talkies, it aims to partner with production houses across the country and produce mini web series and episodic shows in vernacular languages. ShareChat’s initial partnership was with the Bengaluru-based Hera Pheri Films, and was titled Ishq Mohalla.

The original vernacular content platform is aimed at producing shows only in regional languages, and was further boosted by the acquisition of Clip. The company claimed that within the first week of being aired on ShareChat, Ishq Mohalla garnered over 2.5 million views and was shared nearly 10,000 times on WhatsApp. Subsequent shows produced on ShareChat Talkies include 18 Days: The Mahabharata, a 16-episode short motion comic series based on Grant Morrison’s comic book of the same name, and produced in partnership with Graphic India. In two weeks, it received 10 million views and over 15,000 shares, showing the demand for local language content in India.

Politics

Use among politicians and parties

With its increased user base, ShareChat sees active use by politicians and political parties in reaching out to local communities, and talking to them in their own language. Use by political parties grew in the latter half of 2018, and was boosted by the fact that the platform is available only in vernacular languages. While ShareChat was initially made available in English as well, Sachdeva mentioned in a recent podcast with entrepreneur Shiladitya Mukhopadhyaya that this was done because people “were just picking English because they have this feeling that all the apps built with non-English UI are not good quality.”

As of now, both the ruling Bharatiya Janata Party, and the opposition Indian National Congress have official accounts on ShareChat for both their central offices as well as regional divisions. Some of the more notable political names with accounts on ShareChat include ex-Madhya Pradesh chief minister Shivraj Singh Chouhan, and present Maharashtra CM, Devendra Fadnavis.

ShareChat also provided an instance of accurate exit poll prediction, where after the 2018 Gujarat assembly polls, it published a report by tabulating all the responses for and against the political parties. That report correctly predicted the Gujarat assembly poll results, where the BJP won the majority with 99 seats, against 61 for Congress.

Role in 2019 Lok Sabha election

This has led to ShareChat being considered a prime social media platform that influences opinion ahead of the upcoming 2019 Indian Lok Sabha elections. In March 2019, it became one of the major social media platforms to come forward and voluntarily cooperate with the Election Commission of India to fight against the propagation of fake news. The collaboration with the ECI would include a notification mechanism for political violation, setting up a certification process for political advertisements that separate ads and actual content, time-limited and prioritised action on behalf of the social media platforms in case of violations, prevention of abuse and propaganda, and most importantly, identification and removal of fake news from their platforms.

In line with these strategies, ShareChat has also collaborated with NewsCheck, a machine learning-driven content authenticity verification platform, to expedite removal of fake news and counterfeit content on its platform. As of March 2019, ShareChat has been named alongside Facebook (including WhatsApp and Instagram), Google, Twitter and ByteDance (including TikTok and Helo) as the most active social media platforms in India, and have been regarded with heightened responsibility of managing content authenticity and propaganda, especially during the election period.

References

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