Homegrown messaging app Hike has raised $175 million in a series D round of funding led by Taiwan's Foxconn and Chinese firm and WeChat owner Tencent. The new investment makes Hike the country's latest unicorn, with the startup being valued at $1.4 billion.
Hike's existing investors Tiger Global and Bharti SoftBank also participated in the funding round. Hike founder and CEO Kavin Bharti Mittal said the funds will be used for investing in services, people and office space, but also AI, machine learning, virtual reality and augmented reality. However, he said Hike had no plans of working on bots in the next couple of years. "Over 30% of our users still come from 2G, but that number is declining. We have to think about what messaging looks like in a 4G world," Mittal said.
Mittal's father Sunil Bharti Mittal is the well-known billionaire promoter of Bharti Airtel, India's largest telco by subscribers. A JV between Bharti Group and Japan's SoftBank was among the original investors in Hike.
Launched in December 2012, Hike is one of WhatsApp's major rivals in India. In January, it claimed that it has 100 million registered users, but has not revealed how many of these are active users. Hike has also said that over 40 billion messages are exchanged on the platform every month. Around 95% of users being in India, and Delhi, Mumbai, Jaipur and Ahmedabad being its primary cities. In contrast, Facebook-owned WhatsApp has 70 million users in India, counting the country among its biggest markets.
It had earlier raised $65 million in funding Tiger Global and Bharti SoftBank in 2014, and a smaller investment from Silicon Valley veterans such Quora founder Adam D'Angelo and WordPress founder Matt Mullenweg in 2016.
Hike has been trying to distinguish itself from WhatsApp through localisation. The app is available in seven regional languages. Its most popular feature is its range of over 10,000 stickers in 40 languages and themes. It also introduced features tailored to internet data constraints in India, such as sending free SMSes and sharing files without an internet connection. The app also has features like news, cricket updates, games and shopping coupons.
"We believe India is a sight and sound market," Mittal said. "They'll express themselves through stickers, photos and audio. For instance, stickers trump the need to type, they let you just tap and express yourself. Communication is far more than text."
The investment also gives the Chinese company Tencent a toehold in the Indian market after its messaging app WeChat failed to make a dent in the country. Hike will also be able to access the technology and insights of Tencent. "Hike deeply understands India; a highly diverse market with many nuances," Tencent president Martin Lau said. "It is on a mission synergistic to ours, which is to enhance the qualify of a human life through internet services. With our investment, Hike will be able to leverage our deep domain expertise in the messaging platform space to provide more value to its users in India."
Like WeChat, Hike will be hoping to use its local flavour to its advantage to counter WhatsApp. "Localisation is deeply embedded in the soul of the product. Tencent understands that you have to understand the local nuances very deeply in a market like China," Mittal said. "In a lot of ways, India is actually more similar to China than the West. They get that."