Hike’s Kavin Mittal talks about $175m boost in its battle with WhatsApp

Kavin Bharti Mittal, founder and CEO of Hike. Photo credit: Hike.

Facebook’s WhatsApp may soon find itself in serious competition in India with home grown chat app Hike Messenger, as the four-year-old company secured US$175 million funding from Chinese internet giant Tencent and manufacturing firm Foxconn.

This is the fourth venture capital round and the biggest to date for Hike, taking the total investment to over US$250 million so far. Existing investors – Tiger Global, Bharti, and Softbank Group – also participated in this round.

Hike users will soon be able to see and share videos and pictures based on alternate realities.

Apart from the size of the funding, the deal is important also on the count that Tencent, the company that pioneered messaging with WeChat, is bringing on board expertise and innovations of international standards.

The fact that Tencent and Foxconn valued the company at a whooping US$1.4 billion also says a lot about the confidence entrusted on a brand like Hike.

The valuation, at the rate of over 100 million subscribers (Hike did not say how many were active), translates roughly to US$14 or INR 1,000 per user. Founder and CEO of Hike Kavin Bharti Mittal said the company is “still a couple of years away from making profits,” but is confident of monetizing the said valuation when the company does start making cash.

Expect new features

“Tencent and Foxconn both have pedigrees that speak for themselves. Their investment also means that their expertise will come on board. Especially in today’s market where funding is drying out, this is an extraordinary deal,” Kavin said.

Hike’s Kavin Mittal. Photo credit: Hike.

“We will use the funds to justify the valuation. We will be investing this amount in services, people, office space and some long term bets in areas of machine learning, computer vision, augmented and virtual reality features,” he added.

This implies that Hike messenger is working hard to get users addicted to the platform, where they will soon be able to see and share videos and pictures based on alternate realities.

Kavin told Tech in Asia that the company is also working on a feature where the app will use a special sensor in the smartphones to capture and attach smell to messages. Brand channels built on geolocation is another feature the company is working towards. By way of technical know-how sharing, WeChat’s popular mobile wallet feature, where friends can send cash to each other digitally, may also find way into Hike platform.

Users exchange 40 billion messages per month.

Acquisitions on the cards