Google is reportedly holding preliminary talks with Bengaluru-headquartered social media startup ShareChat for a likely acquisition at an estimated valuation of around $1.03 billion. According to a report in The Economic Times, both ShareChat and Google have signed a non-binding proposal and appointed investment bankers to take the talks forward. Google has already begun conducting the due diligence of the startup.
The startup had last raised $40 million in a pre-series E round at a valuation of $650 million. For the $264 million it has raised so far, Sharechat has found takers like Twitter, SAIF Partners (now, Elevation Capital), Lightspeed Ventures along with Indian corporates like Dr.Pawan Munjal and DCM Shriram Promoters Family Office.
The Indian social media platform Sharechat has built a strong base for itself in India. As a conscious decision, Sharechat isn’t going after the first adopters of the internet in India the English-speaking audience which consumes content similar to the West. Sharechat has a presence in over 15 Indian languages.
Google would gain from Sharechat’s expertise in vernacular language growth. Google in July had announced that it would invest a whopping $10 billion in India through the Google for India Digitization Fund, out of which the tech giant had already invested $4.5 billion in Reliance Jio.
On the prospective deal with Google, the source said “the time is good to sell as this is a money intensive business. He pointed out the costs involved in acquiring licences for music and pay for influencers, besides the presence of many players in the segment.
For Google, this is in line with its pledge to invest $10 billion in India, and will provide it entry into the Indian social media space where ShareChat has been among the biggest gainers over the last six months since the ban of Chinese video-sharing app TikTok, the report said.
ShareChat’s active monthly users crossed the 160 million mark and it serves 15 Indian language markets. India is emerging as a huge internet market with close to 700 million internet users, making it a lucrative bet for Google.