The funding round was led by Tencent and Foxconn
WhatsApp’s rival in India, Hike, is about to make its competitors’ life much more difficult in the region. The messaging app closed its Series D funding round, which was led by new investors such as Foxconn, a manufacturing company, and Chinese Internet giant, Tencent.
Existing investors, such as SoftBank Group, Bharti Enterprises and Tiger Global also participated in the Series D funding round. The round gave entry to Hike Messenger in the prestigious “unicorn” club, as it is now worth around $1.4 billion. Tech startups with valuation of more than $1 billion are eligible for the club.
Hike has ruled out all possibilities to go for an IPO in the future despite being a unicorn. The raised amount will be used to add more services to its current offerings. The company will also hire more people, increase office space and place its bets on virtual reality (VR), augmented reality (AR), artificial intelligence (AI) and machine learning.
Since Tencent is now an investor, Hike will depend on the Chinese company to provide it with content and games for its platform. Tencent has already changed the way WeChat operates. Now, the Indian chat app offers food delivery, ride hailing, and other services within the app itself. It’s often referred to as a complete mobile operating system (OS).
Hike will continue to provide multiple services from its messaging app, just like WeChat. For now, Hike users can read the news, get shopping coupons and play games within app. However, the addition of new services, such as ride hailing, movie tickets reservation and food delivery will give it an advantage over its rivals in the region.
Over time, Hike has increased in popularity and now has more than 100 million users on its platform who share more than 40 billion messages each month. Official stats suggest that 90% of its users are aged between 15 and 25. Hike came up with privacy features, such as hiding the last viewed time or any chat via a hidden mode. These features were then copied by other messaging apps as well.
Hike says that introducing privacy features was absolutely critical for the company. In India, a single smartphone is often used by the entire family. To maintain privacy of all the users, it was essential to introduce new privacy features. The app is available in seven languages and provides stickers in more than 40 languages.
As WeChat has failed in India, it is no longer Hike’s regional competitor. However, WeChat can still benefit from India if it helps Hike develop services such as a payment solution system that may be launched in a year. Moreover, Hike CEO, Bharti Mittal, is hoping that the Foxconn, who took part in the latest funding round, would pre-install the app in its smartphones.
Hike is the first ever social unicorn company in India. With the ever-growing smartphone and Internet market in India, it might turn out to be a good time for Hike to work on its future services. Securing $175 million at a time when fund raising is cooling down goes to show that investors are still ready to put their money in hot startups.