Sharechat - Bharat's gateway to the internet
Our first interaction with the Sharechat team happened in January 2015, when the founders were building an online debating app called Opinio that showed up in our in-house tool for tracking fast-growing apps on Google Play. Ankush, Farid, and Bhanu are all mates from college (in fact Ankush was still wrapping up his last term when we met first) and had been dabbling with multiple ideas and ventures together. We loved the energy, passion, and chemistry that the team brought with them. What stood out even back then was the team’s intricate understanding of the Indian user, a user they knew very closely having lived and studied in non-metro India at IIT Kanpur. As the team spent more time with the users gathering insights, the idea of Sharechat started taking shape. We continued meeting the team frequently post the first interaction and found the evolution of the team’s thought process very natural and impressive.
India had 120M smartphone users back then, and roughly a similar number of Facebook users.
This number was expected to grow to 200M or so over the next 18-24 months. The incremental set of users were likely to come from Tier 2 & 3 towns, where literacy levels, especially English language skills were very low and this led to fundamentally different needs and preferences. For example, these users refrained from commenting on Facebook and satisfied their social networking needs on platforms such as WhatsApp where they could interact with like-minded people. They were not very comfortable with Google / Youtube search and WhatsApp forwards were their primary source of content. Sharechat saw this as an opportunity to create a new social network built entirely for and by regional language users. Sharechat aspired to become the first app that this audience would download on their phone to discover relatable content that they could then share ahead to look good. Sharechat wanted to create an environment where the users were comfortable expressing their opinions and emotions without the fear of being judged.
While this seems quite obvious in hindsight, there were several unanswered questions back then for us.
The cost of mobile data was ~INR 226/GB in 2015 and the average internet user was consuming ~0.3 GB of data/month v/s current levels of ~INR 10/GB and ~8 GB/month. Reliance Jio, which has been the biggest driver of internet adoption in India, launched publicly only in September 2016. Social Networking was an evolved business model globally and the threat of incumbents launching competing products / adapting to India’s reality quickly was quite real. The obvious questions around how and when a platform like this could monetize and what exits could look like were also very hard to answer.
India first team and product
"Our conviction on the team and the twin beliefs that mass-scale Internet adoption in India and a local social network emerging were inevitable helped us cross the line."
Mayank Khanduja, Partner, Elevation Capital
Elevation invested $1M in August 2015
At the time we signed a term sheet in August 2015, Sharechat had:
live on the App
monthly active users
time spent per day
unique content pieces
In less than 12 months from our investment, Sharechat had grown it's user-base by more than a hundred times.
The Sharechat team has been extremely customer-obsessed and insight-driven from Day One.
Sharechat has made rapid iteration and experimentation core to their way of operations. This has led to various interesting discoveries along the way. One such example from 2016 is when the company decided to remove the English language completely from its product, despite 50% of users signing up to the app with English as one of their preferred languages. In order to understand their users better, the founders personally traveled to 3 remote parts of the country for 2 weeks and spent time living and interacting with the people there. They realized that if you show English as an option to users, they will end up choosing it despite not being fully comfortable because they did not want others to perceive them as someone who didn’t understand English. However, once they chose English, they found it difficult to navigate the app and couldn’t derive maximum value from it. Therefore, the team took a bold step and decided to get rid of English completely to eradicate this fear in the minds of their users. As a consequence, retention and engagement on the platform spiked up quite sharply over the next few months.
“One of the really good things about Elevation ..
.. that I find better in comparison to the other interactions we had with some of the other well-known investors in India is that everyone else sort of pushed us to build "X for India", but with Elevation, we felt that we had breathing room. We could innovate and experiment, and that is why we ended up creating such a unique product.”
Ankush Sachdeva, co-founder and CEO, Sharechat
Sharechat doubled in 3 months and hit 1M+ Monthly Active Users in October 2016.
$4M raised from Elevation, Lightspeed and India Quotient
Sharechat focused on viral growth by creating user delight.
Given the long monetization cycles in social and content businesses, the company realized that they could not spend aggressively to grow, and hence never relied heavily on paid marketing. In the early days, Sharechat focused a lot on creating hooks that would keep users coming back to the app on a daily basis. Good morning messages, festival wishes, and content for WhatsApp statuses were some of the hooks discovered and for a long period of time, Sharechat became synonymous with these new content formats. Once these were in place, the company kept going deeper into the interest graph of a user and started enabling discovery and creation of content in long-tail categories such as exam preparation, Mehendi design, ethnic wear, etc. As the company built depth in these categories, their D30 retention increased by almost 30-40%. By 2016, there was humongous amounts of content getting created on the App, but not all of it was relevant for all users. Sharechat realized this and invested tremendously in creating a top-notch content targeting/feed algorithm, which surfaces the best content for each user based on 100s of signals generated on and off the platform.
Sharechat doubled again in the next 7 months and hit 2M+ Monthly Active Users in March 2017.
$18M raised from Xiaomi, Shunwei, Elevation, Lightspeed.
“We had just graduated out of college and had no experience in navigating the VC ecosystem. On that part, Mayank really helped us a lot. We could have really strategic discussions and very simple and tactical conversations too. Having that comfort that you can even ask basic questions to your investor was super helpful. And, we had a lot of basic questions, given that we were so young.”
Ankush Sachdeva - founder & CEO, Sharechat
Sharechat grew 5X in the next 12 months, to hit 10M+ Monthly Active Users in March 2018.
$100M raised from Shunwei, Morningside, Xiaomi, Elevation and Lightspeed
40M+ MAU & 1M+ unique posts / day
Sharechat crossed 40M MAU and 1M+ unique content pieces created / day in April-19. The company had grown 20X in the last 25 months.
Twitter's first India Investment
In August 2019, Sharechat raised $100M from Twitter, TrustBridge, Shunwei, Elevation, Lightspeed.
Sharechat launches Moj
When the Indian government banned Chinese apps in India in 2020, there was an immediate void created in the short video space which TikTok used to occupy. Sharechat’s user-base grew 4X overnight on the day that TikTok was banned. To satisfy this need of their users for short videos, Sharechat was able to leverage its existing technology and feed algorithm to launch Moj in ~30 hours. Moj is now the market leader in this space and ~40-50% larger than the second player.
“One thing we have always believed ..
.. is that we will grow with our audience. Today, five years into our journey, we observe that our users are opening up to the idea of creating their own videos based on multiple images. And, I am sure, had we been pushing video content four years ago, we would have ended up being just another app which was not designed for India, but just modified for India.”
Ankush Sachdeva, co-founder & CEO, Sharechat
In July 2020, Elevation and Lightspeed led a $40M round in Sharechat.
Sharechat crossed 200M Monthly Active Users in August 2020. The company grew 20X in the last 25 months.
1 in 4 Internet users in India is using Sharechat today
Sharechat has had a fantastic run over the last 5 years and has firmly established itself as the leading social network for Bharat. Sharechat is one of the few companies that we have met that has had very large ambitions from the beginning but operated very frugally. From a technology perspective, the company has always built for scale. Even when the company was at 1 Mn DAU, the tech infrastructure was set up in a way that it could scale to 100 Mn DAU. Additionally, the team has always hired the best tech and product talent where a relatively small team is able to run two platforms with a total of 240 Mn+ MAUs. As a result, all along the life of the company, about 70% of their monthly burn was just on tech infrastructure. The team’s in-depth understanding of the Indian user has helped them create a rock-solid product that runs on a very robust content targeting/feed algorithm which is probably the biggest moat in the business today.
We feel privileged to have partnered with Sharechat in this extremely satisfying journey, where today:
live on the app
Monthly Active Users
Time spent per day
Unique content pieces
On certain dimensions, Sharechat has better metrics even in comparison to global social networks.
The team seeded PGC content on the platform in the early days to get the flywheel started. But the eventual goal was to drive user-generated content, which has been the north star metric for the company from Day One. As a result, today, 90% of content on Sharechat is user generated. In fact, even at the Series A stage, 9% of the users used to create original content on the platform compared to 2-3% for even the most established social networks. Sharechat’s relentless focus on virality driven growth and on fine-tuning it’s content targeting/feed algorithm to create customer delight has also led to best in class retention metrics.
While Sharechat is the market leader today, there is still a very long way to go.
About 50% of India is still not using mobile internet and Moj as a product is still evolving. Marketing spends from large online bands and incumbent FMCG players have started moving to platforms like Sharechat and Moj now and slowly the world is waking up to the fact that these twin platforms are the most effective way to reach out to the average Indian consumer.
“The Sharechat team has always been obsessed with their customers and built a product around their needs, which is what attracted us to them that early. We are extremely thrilled to have been Day One partners with them on this one-of-a-kind journey of creating India’s first homegrown social network. Along this journey, we have seen the founders blossom from fresh IIT graduates to becoming the best product and tech leaders in the country.”