Indian messaging client and striving-to-be-a-WhatsApp rival Hike, has today confirmed the rumors and announced the closure of a fresh $175 Million round of funding to invest in its long term goals and visions. Joining the long list of Indian unicorns, Hike has secured backing from investors — Tencent Holdings Ltd. and Foxconn Technology Group, at a valuation of $1.4 billion.
This Series D round also saw participation from existing investors, including the likes of Tiger Global, SoftBank Group and Bharti Enterprises. This is the fifth and the largest ever round secured by the Indian messaging platform. Prior to this, the company had raised $65 million in 2014 to build a strong localized base for its platform in the country. The total amount of funds raised by Hike now amounts to a whopping $261 million.
The company is looking to deploy these funds to further push Hike to greater heights, as it invests in building out functionalities of the platform that will be key to their long term goal and success.
Commenting on the funding round, Kavin Bharti Mittal, Founder and CEO, Hike Messenger, says,
Tencent and Foxconn both have pedigrees that speak for themselves and such an investment especially in today’s market just goes to show the strong foundation on which Hike is being built.
The whopping $175 million investment from China’s Tencent Holdings comes at a the heels of the company’s rival Line’s bombastic dual listing on the New York and Tokyo stock exchange. Hike, the messaging service is built and relies heavily on localization to push content and features to users in the country. Attracting interest from Tencent might seem unnatural, but is only a power move by the owner of WeChat.
Much like WeChat, which focuses on providing multiple services and apps to run independently inside its own service, Hike allows you to do the same on its messaging app. The Indian messaging service has multiple miniature services, like News bulletin, games, coupons, and a car pooling app integrated right into its platform. These integrated services, the free SMS service, and the feature to hide chats from nosy relatives is what sets the Indian messaging service apart from Facebook-owned WhatsApp.
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
comments Tencent President Martin Lau.
WhatsApp is still the dominant messaging app in India, with more than 100 million users out of the recently achieved magic number of 1 billion but four-year old Hike is catching up to the American rival. Earlier this year, it had announced that it has successfully crossed the 100 million registered users(not all active) milestone. About 90 per cent of these users were aged under 30, and about 40 million messages were being exchanged on the service in a single month.
CEO Bharti believes that every market has two messaging apps that do well, but there’s only one that replaces SMS and one that does a lot more than that. And he adds that WhatsApp might have replaced traditional messaging in India, but Hike is the second app that competes with the former and is being used very actively in addition to other apps.
In a telephonic interview with TechCrunch, Bharti also comments on the role of Tencent in the company after this funding round. Talking about the same, he explained,
Operationally nothing changes, there’s no discussion around integration. Tencent has a minority stake… our goal is to make the partnership a key success, [there’s] no-one better than Tencent because they are the best at what they do.
Hike Messenger has topped up its bank account with massive funds of late, along with an advisory support from the company behind the biggest messaging app in China. It is now ready to expand its features and integration support with some help from Tencent to take on the likes of Messenger and WhatsApp in the country. It could also setup or acquire an additional tech team to work on AI, machine learning to expand their platform to include chatbots and assistants.
You can say it won’t be an easy task for a local Indian service to take on the messaging giant from the West, but Didi’s feat over Uber in China gives us all some hope to keep moving forward with our struggles and succeed. And hike has the necessary cash backing too.