Two entities owned by China-headquartered internet and gaming group Tencent have provided $225m for India-based social network operator ShareChat as part of its $502m series E round, the Financial Times reported today.
ShareChat runs an online platform with more than 160 million monthly users who can communicate with each other in 15 languages. It also operates a short-form video app called Moj with 120 million monthly active users.
The round was led by hedge fund manager Tiger Global Management earlier this month and also featured venture capital firm Lightspeed Venture Partners as well as Snap, the owner of messaging app Snapchat.
Tencent provided almost half the capital in the form of convertible debt, from Netherlands-registered vehicles Zennis Capital BV and Hlodyn BV, which list Tencent executives Jingsi He and Constant Pieter van der Merwe as directors. Should the debt be converted into equity, they would own a 19.7% stake in ShareChat.
Tencent would be unable to invest in the company directly due to strict rules governing the acquisition of stakes in India-based companies by Chinese entities. The same rules have allowed ShareChat to grow without competing against companies such as the China-based TikTok.
The series E round valued ShareChat at $2.1bn and hiked its overall funding to $765m. It followed a $40m pre-series E round in September 2020 backed by social network Twitter, India Quotient, Lightspeed Ventures, SAIF Partners, Pawan Munjal and Ajay Shridhar Shriram at a $650m valuation.
Twitter, India Quotient, Lightspeed Venture Partners and SAIF Partners were existing backers while the company’s earlier investors include electronics producer Xiaomi, HillHouse Capital, 5Y Capital, Shunwei Capital, TrustBridge Partners and Venture Highway.