Snapchat parent company Snap Inc (NYSE:SNAP) and Twitter Inc (NYSE:TWTR) participated in a $502 million funding round for Indian content sharing platform ShareChat, the latter said in a statement Thursday.
What Happened: The Bengaluru-based startup said Tiger Global Management LLC, Lightspeed Venture Partners participated in the funding round that valued the business at $2.1 billion — alongside Snap and Twitter.
“We are at a significant inflection point in our company’s journey — as the internet penetration further deepens in India we are well-positioned to expand our ecosystem of products to 1 Billion+ MAUs cumulatively,” ShareChat CEO Ankush Sachdeva said.
The ShareChat app has 160 million users in India and its sister concern Moj has 120 million.
Why It Matters: Social media apps such as Facebook Inc (NASDAQ:FB), Instagram and Twitter have been looking to scale up their presence in India, a country of 1.3 billion population with rising internet pentration. In addition, Indigenous apps such as Sharechat and Moj are finding favor among users in India following the recent border-related tension with its neighbor China and the subsequent ban of similar alternatives such as ByteDance-owned TikTok.
Price Action: Shares of Twitter closed about 3% higher at $68.99 on Wednesday and those of Snap 5.89% higher at $60.23.
Benzinga's Take: Local social media companies make for a lucrative investment as international giants like Facebook and Twitter too have run into trouble with regulators in the country. In addition, ShareChat looks to appeal to speakers of local languages over English, banking on a largely untapped market.