India-based instant messaging app Hike is looking to raise more funds in 2019 and will start experimenting with several monetization models from 2020. Hike counts Softbank, Foxconn and Tencent as its investors. Moreover, Hike has already stripped out payment-related services and is focusing more on messaging and stickers for the moment.
A person familiar with the matter talked to Economic times and said that Hike has shut the Total app which it launched in January last year. The messaging app is following a ‘back to the basics’ strategy and may also launch a separate content related app (similar to TikTok). The decision comes following a spike in the interest in short videos apps in India and overseas.
“In the last year and a half, Hike focused on experimenting with products in new verticals and added stuff at the cost of something else. In internet space, products evolve quickly and many times, they evolve away from the core. A few months back, Hike decided to focus on its core, which is social. A majority of the funds that we raised from the last round are still available. But late 2019 or 2020, we will be looking to raise more funds. Existing strategic investors would be a part, but we are open to new ones as well.” the person said.
However, Hike has not commented on the story. Founder by Kavin Bharti Mittal, Hike has raised $261 million from several investors so far including Chinese internet giant Tencent Holdings, manufacturing company Foxconn Technology Group and Bharti group itself. Lately, it raised $175 million from Tencent and Foxconn at a valuation of $1.4 billion. Kavin Bharti Mittal is the son of Sunil Bharti Mittal, an Indian Billionaire entrepreneur, philanthropist and the Founder & Chairman of Bharti Enterprises.
With the penetration of 4G internet and availability of smartphones in India, the market for apps like Hike is good ahead. The app is now focused on engagement and daily active users. When Hike raised the funds in 2016, it went on introducing new features, exploring multiple directions and hiring new team which ultimately led to losing focus on its core product. That set them back by a year and a half.
In order to tackle these challenges, Hike has laid down its manpower, reducing it to 150 from 350 and shut down many of the new features. The firm has also closed its Bengaluru office. Hike is focusing on to provide the stickers and voice technology with an aim to reduce the dependency on the keypad. Moreover, it is working on in-house encryption technology to enhance security and protect the privacy of its users.
Hike’s biggest competitor in India is WhatsApp, which Facebook acquired for $19 billion in 2014. Apart from that it also competes with Facebook Messenger, Google Hangouts and Telegram. WhatsApp has an enormous base of 20 crore users in India. Hike has earlier acquired companies like Creo, Zip Phones and InstaLively and may continue its acquisition strategy to strengthen its presence in India.