Messenger, an Indian rival to Facebook’s WhatsApp, has achieved
“unicorn” status after Tencent and Foxconn joined a fresh funding round
that valued the business at $1.4bn.
The $175m in financing has made the company one of India’s most valuable
technology start-ups just three years after launch. International
investors have backed the business to follow in the footsteps of WeChat
in China and Line in Japan in building viable messaging businesses in a
large local market.
India’s start-up scene has attracted international investors such as
SoftBank, the Japanese technology group, and Tiger Global, the New
York-based fund manager, both of which backed Hike Messenger in previous
funding rounds and participated in the latest financing.
There have been concerns that the Indian market is in danger of
overheating as the influx of funding risked overvaluing companies, but
the success by Hike Messenger shows that there is still appetite among
However, Hike still trails far behind WhatsApp, which has 1bn users
globally and counts India as one of its largest markets. Hike has tried
to take the fight to its Facebook-owned rival with local content,
including news in both English and Hindi and live cricket scores, as
well as a privacy mode.
The service also uses a Bluetooth-type data transfer system that allows
friends to share content between phones without incurring data charges
over telecoms networks. It is estimated that about a third of smartphone
users in India do not have a data connection.
The arrival of Tencent and Foxconn as investors in Hike is the latest
sign that the largest Asihttps://creator.zoho.com/joe.russ/ftstyleguide/#an
technology companies are still willing to bet on developing new
services. Both have been active in making larger investments elsewhere
in recent months.
Tencent purchased Supercell, the Finnish maker of Clash of Clans, last
month for $10.2bn after buying out SoftBank’s majority stake in June,
and the Japanese company in turn agreed to buy ARM Holdings for ￡24.3bn.
Foxconn, which assembles the iPhone, completed its $3.5bn takeover of
Sharp, the Japanese technology group, this week and also paid $350m to
buy Nokia’s feature phone business from Microsoft in May.