India’s rival to WhatsApp messenger raises $175M, valued at $1.4B

SAN FRANCISCO (Diya TV) — India’s answer to the popular messaging app WhatsApp, named Hike, today announced it has closed a $175 million funding round led by new investors Chinese internet giant Tencent and manufacturing firm Foxconn. The Series D funding of the four-year-old company gives it a valuation of $1.4 billion, founder and chief executive Kavin Bharti Mittal has revealed.

Tencent, the company which pioneered messaging with WeChat, is the name that should stand out. However, existing investors such as Tiger Global, Bharti and SoftBank also took part in the round, which takes Hike to more than $250 million raised to date. Hike added some strategic investors in the U.S. to its roster earlier this year, but its last major funding was experienced during the Series C round when it raised $65 million.

“Hike deeply understands India; a highly diverse market with many nuances. It is on a mission synergistic to ours, which is to enhance the quality of 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,” Tencent President Martin Lau said in a prepared statement.

Creating out of a joint-venture between Bharti and SoftBank, Hike includes the standard messaging app features you’d expect, as well as free voice calling and a few other twists. Hike has put an extreme emphasis on local users with features that include a privacy option to hide chat messages, in case a nosey relative gets hold of your phone as can happen in India. It also gives users the ability to send an SMS message to those who aren’t using the Hike app.

Targeting the younger demographic has been paramount in the company’s marketing campaigns.

However, WhatsApp presents itself as a huge challenge.

The Facebook-owned company is already the dominant chat application in India, with more than 100 million active users in the country. That’s equal to around one-tenth the country’s total userbase. Hike announced earlier this year that it has over 100 million registered users, but that could simply represent people who have downloaded the app that aren’t using it. Ninety percent of those users are under the age of 30, with 40 billion messages exchanged on the service each month, according to its last release.

Despite its worldwide domination, Hike’s chief executive is certain the company can position itself to become more competitive in the market.

“Every market has two messaging apps that do well,” he said. “There’s one that replaces SMS and one that does a lot more than that. Hike doesn’t even compete with WhatsApp today, it is used very actively in addition to other apps.”

The company is generally upbeat about its future, Bharti Mittal explained that the internet and mobile are still in their infancy in India.

“The very large niche that we’ve covered is only going to get bigger because 500 million more people are coming online in India,” he said. “The path will look very different to the current market and what Hike has been these last few years. For the first time ever in India, we’re seeing 2G usage decline with 3G and 4G on the rise. The internet will be more pervasive and the market can change completely.”