How Kavin Mittal Hitched Hike to the Unicorn Club
At a time when start-ups are trying to stay away from devaluation, homegrown messaging app Hike Messenger announced its Series D funding round of $175 million at a valuation of $1.4 billion, in a round led by
Here are some quick bits from the chat with Founder and CEO of Hike,
I have known Tencent for three years and they keep talking about exploring the Indian market and we’ve known them for a long time and we kept in touch. They are best in what they do. The interest was from both sides. We fund raise all the time we talk to everybody all the time and with Foxconn, our relationship was for a year and a half when Terry ( Gou) was in India I met him then, they saw an opportunity to invest and they took it. On our perspective we persevered. It could not get any better than this. Not only would we get capital but also the ability to scale up our execution machinery, then we have access to their technology and people inside so on and so forth. We talked to a bunch of people and we narrowed down on these two companies as they have a very long term view on the market like we do. Yes as a business we want to have profitability over time but there is no rush to become profitable tomorrow.
Tencent has built something very similar to Hike and certain parts of Hike aspire to what Tencent has done and we will get access to a lot of that and that will help us figure out what’s worked and what hasn’t and importantly how it worked. With Foxconn, from Foxconn’s perpective, their expertise in software is very strong. At different stage of the business the people we talk to change. Going forward it maybe PEs who knows and the relationship needs to be build starting tomorrow. We are still a very young company and in the next five years we could be on our own it’s important to know all the stakeholders before you start that process. Ideally the less capital we raise the better it is, it doesn’t mean we raise no capital, our total investment in the business is $250mn dollars with this round and that’s still small comparatively.
And What for
Products and more products, I think that’s it. A lot of our focus this year is on content; we want to generate more and more unique content. Social platforms have become the hub from which you consume content, News and Games have been doing very well. We want to expand our team find smartest talents in the country and outside. We just got our head of engineering couple of months back from Google, we are potentially looking at acquisitions, technology, people things that we believe will enhance the product that we are building right now and start making some long time bets. We finally have the capital to make long term bets.
Hike has a user base of a 100 million users. 95% of Hike users are based in India and 90% of them are young and below the age of 30. According to the company, Hike users, on an average, exchange 40 billion messages per month and spend 120 minutes per user per week on the platform. Hike hopes to counter three main challenges for the product, local content, privacy and data constraints.
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