Hike, the messenger app, is the latest Indian Unicorn: it has raised $175 million from its existing shareholders, Bharti SoftBank and Tiger Global, and new investors, Tencent Holdings of China and Foxconn of Taiwan, at a valuation of $1.4 billion.
Kavin Mittal, the 28-year-old founder and chief executive of Hike, wants to use this money to make the app smarter. Features like e-commerce and news could get added to it in the days to come. This, Mittal would hope, will help him take on the onslaught from WhatsApp and Facebook Messenger.
Like his father, Sunil Mittal of Bharti Airtel, Mittal is a fast talker and can mix macroeconomics with consumer behaviour and corporate balance sheet with consummate ease. Both believe in scale and leveraging the consumer for growth. And both are tech savvy.
Actually, Mittal has had a way with technology from an early age: at 15, he was writing software code.
In 2006, during the first year of his undergraduate course at Imperial College, London, Mittal helped McLaren Racing, the British Formula One team, embed a technology that would show the track flags on the steering wheel. The highlight of the assignment was a meeting with an upcoming driver named Lewis Hamilton.
Apart from technology, speed thrills Mittal. As a child, he had racing simulators fitted at home. Later, he was a member of the go-kart team at Imperial College. (He was also in its cricket team.)
In 2007, Mittal did his summer internship at the Google headquarters in Mountain View, California, and was impressed with its informal work culture. And the next year, Mittal interned with Goldman Sachs in London. At the end of it, he decided that he would do any other work but become a banker, “because the learning curve plateaus after a while”.
While at Goldman Sachs, Mittal founded his first start-up, AppSpark, along with classmate Namit Chadha to make apps for the Apple iPhone.
The first app they launched, in the middle of 2009, was called Movies Now. It would list all shows and feature trailers. In the US, users could even buy tickets on it. And based on your location, it could tell you which theatre was the closest to you.
The app was downloaded almost 500,000 times. Mittal then planned to give it another feature which would help theatres sell vacant seats at a discount one hour before the show. He even pitched the idea to PVR in India but there weren’t too many takers — the app was put on the shelf.
Mittal next came up with an app called Foodster which told people whenever they went to a restaurant what was popular there. This it did by converting online comments into scores. “But the algorithm ran into trouble when it came to comments like ‘The lemonade is better than my girlfriend’s kiss’,” Mittal said in an interview in early 2015. Foodster met with the same fate as Movies Now.
By 2011, Mittal knew that he had to do something that was of more value than just movies or food. Growing up, he had seen how mobile telephony had changed lives in India. He decided that he would do the same in the mobile internet space in India.
He relocated from London, leaving his course for a private pilot’s licence midway, to New Delhi, and started work on Hike in early 2013, and rolled it out towards the end of the year. To attract youngsters to Hike, Mittal introduced features that hid personal chats from parents. Stickers were customised for local markets: those available in Mumbai were different from those in Patna. A range of coupons was made available to users.
Hike has over 100 million users, who, on an average, use it for 120 minutes per week. “That makes it one of the top five apps in the country,” Mittal says with barely concealed pride.
The new investments are meant to give Mittal the wherewithal to close the gap with the market leaders. In addition, he hopes, Tencent and Foxconn will give him vital strategic inputs. “Tencent runs the extremely popular messenger service WeChat in China which has half a billion users, and Foxconn’s knowledge of software, especially Android, on which India runs, is tremendous,” says Mittal.
The two investors were identified and inducted into Hike by Mittal. Tencent had launched WeChat in India, with limited success, in 2011; Mittal says he had been in touch with the company since then. Similarly, he had several meetings with the Foxconn brass which came to India regularly in search of investment opportunities.
In the early days, Hike was often called a Bharti Airtel app. Today, the users are spread across service providers and more or less reflect the market shares of the incumbents. Almost 75 per cent of our users are non-Airtel subscribers,” says Mittal. The big question is, will Hike be picked up by the subscribers of Reliance Jio, which wants to launch soon and has locked horns with incumbents like Airtel? “Absolutely yes,” says Mittal.
Watch this space.