Kavin Bharti Mittal, a scion of the family behind India's second-biggest wireless operator, is planning to revive his struggling technology startup more than four years after it was valued at $1.4 billion (roughly Rs. 10,180 crores) by backers including Softbank Group.
Since attaining unicorn status in 2016, New Delhi-based Hike has suffered a string of setbacks. The latest blow came last month when it shut down its signature messaging app - a platform that grabbed the attention of other investors such as Tencent and Foxconn for taking on WhatsApp in the local market.
That setback doesn't mean the end of the road for Hike, the 33-year-old son of Bharti Airtel's billionaire-chairman Sunil Mittal, said in an interview last week. In a bid to rekindle growth, he's now betting on a Facebook-like new social networking platform that promises to weed out “creeps” and “fake profiles” as well as a gaming app that aims to tap rising demand in the world's second-most populous country.
“This is the most excited I've been in 18 months,” Mittal said. Hike would go back to investors to raise funds sometime this year, he said, declining to elaborate.
Mittal's attempt to salvage the startup highlights the struggle faced by many Indian technology entrepreneurs who are chasing a market of more than a billion consumers with a smartphone user base that's projected to surpass 750 million this year, with online entertainment to financial products and shopping. While some of them have aspired to become local versions of Facebook or an Amazon, few have so far succeeded in even coming close to beating the US giants.
In recent years Mittal has seen more lows with Hike, as the glory of its early years faded. Despite becoming a hit early on thanks to its quirky stickers and a privacy feature that let teenagers hide chats from parents, Hike's messenger app overtime failed to challenge the popularity of WhatsApp in India. Another idea of Mittal - a super-app similar to China's WeChat - also didn't take off.
Hike saw its revenue from operations crash to $5,000 (roughly Rs. 3.6 lakhs) for the year ended March 2019 - the latest year for which data is available - from $81,000 (roughly Rs. 59 lakhs) the year before, according to researcher Tracxn Technologies Losses from continuing plus discontinued operations for FY19 were at $235 million (roughly Rs. 1,700 crores), Tracxn data shows.
Mittal is now focused on bolstering revenue through Hike's two new platforms.
Vibe is a by-approval-only social networking website that, according to its website, promises to connect users with “the funnest people online. Safely.” More than 300,000 applications have been received since the sign-ups opened last month.
Rush is Hike's new bite-sized gaming platform that was launched in December and is an online version of gaming arcades with coin-operated game machines typically found in malls and amusement parks.
India's nascent online gaming industry is expected to more than double to $2.8 billion (roughly Rs. 20,370 crores) in 2022 up from $1.1 billion (roughly Rs. 8,000 crores) in 2019, according to a Deloitte report last month, boosted by pandemic-led lockdowns that forced Indians to stay at home. Mukesh Ambani, India's richest man, said in February last year that gaming will be bigger than music, movies, and TV shows combined.
“With Vibe and Rush, we have completed one big pivot. We are cutting away the old stuff,” Mittal said, declining to share the latest financials. “We'll start thinking about what it means to be profitable in 2022.”
- With assistance from Saritha Rai.
© 2021 Bloomberg LP
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