ShareChat eyeing to boost $200 million from Chinese tech large Tencent

Made-in-India social media platform ShareChat is reportedly aiming at elevating $200 million from Chinese expertise large Tencent through optionally convertible debentures. In view of the strict Foreign Direct Investment norms put by the Government of India final yr after the Galwan Valley face-off between India and China, it’s attainable that the funding can be routed through a Europe-based entity. According to the rules put in place in 2020, FDI from international locations that share a land border with India will want prior approval from the central authorities.
Local information storage and processing could also be in danger in future
Though the funding is predicted to be achieved utilizing optionally convertible debentures which might be debt devices, there are clauses that permit such funding to be transformed to fairness after a sure time period. In that case, the administration management of ShareChat could shift from the Indian administration to the Chinese tech large. According to Economic Times, consultants consider there’s a attainable danger associated to native information sharing and processing in case Tencent converts the convertible debentures to fairness shares in ShareChat.
Notable investments in ShareChat
In August 2019, ShareChat managed to boost $100 million from microblogging large Twitter. In September 2020, it raised one other $40 million from current traders, together with Twitter, Lightspeed Venture Partners, and others. Some different notable names within the listing of traders embrace TrustBridge Partners, Shunwei Capital, and Elevation Capital.
Last yr, ShareChat had appointed Gaurav Mishra, former product chief at Uber. The firm additionally introduced that it was planning to open ShareChat Labs, a Centre of Excellence in Palo Alto, California. In November 2020, there have been experiences that Google was in talks with ShareChat for acquisition at a possible valuation of over $1 billion.
Tiktok ban had helped apps like ShareChat to flourish
When TikTok was banned in June final yr, it left an enormous void in India’s short-video market. Several apps, together with ShareChat’s Moj, took benefit of the scenario and captured a big share within the Indian market. So far, the app has crossed 100 million downloads on the Google Play retailer.
As the federal government has been agency about not permitting Chinese apps to make a comeback within the Indian market, a number of apps, together with TikTok, Helo, WeChat and Alibaba’s UC Browser, have been completely banned in January 2021 after the mother or father firms of those apps failed to present a passable reply to Indian authorities’s discover.
Tencent’s penetration in India
Notably, together with over 200 different apps that have been of Chinese origin, the Central Government had additionally banned PubG, during which Tencent owned 10% share. Also, one other social media app WeChat was completely banned by the Indian authorities in January. However, a number of firms in India have Tencent as one of many traders, together with Flipkart, Ola, Swiggy, Hike, Ibibo, Policy Bazar, Udaan, MX Player, Khatabook, PocketFM, Practo, BYJU’S and others. Globally, Tencent has invested in over 800 firms.