The Social Networking Market in India is expected to witness a compound annual growth rate(CAGR) of 5.95% in a projected market volume of $1.312 billion by 2027. In January 2024 India recorded 462 million social media users, equating to 32.2% of the total population as the population of India then stood at 1.44 billion.
There were 751.5 million internet users in India which increased by 19 million between 2023 and January 2024 while 61.5% of India’s total internet user base have used at least one social media platform in 2024. In early 2024 Facebook, YouTube, Instagram, LinkedIn, and Snapchat had 366.9 million,462 million,362.9 million,120 million, and 201 million Indian users respectively as per data published in Meta’s advertising resources.
Some social media platforms such as Sharechat, Koo, Josh, Moj, and so on are made in India to explore this market through innovation and intelligence. But recently some Indian Social Media platforms have witnessed a sharp drop in the market. So, in this article, we will introduce some of those Indian social media tech companies and analyze the reasons behind their decline.
Hike Messenger
Founded by Kavin Bharti Mittal, Hike Messenger was launched in December 2012 as India’s homegrown solution akin to Facebook Messenger and WhatsApp. This chat app was rebranded in April 2019 as Hike Sticker Chat to offer a sticker-centric experience to its users. The reports say that as of August 2016, the startup had about 100 million registered users while the users were spending 35 minutes daily on the app. However, given the circumstances, the situation did not allow for continuation, leading to the brand’s decision to shut down.
The founder of Hike Messenger on a social platform declared that the Hike chat app will shut down on 15th January 2021. Although Mittal didn’t give a cause for its closure, he shared his realization by admitting that the global network efforts are too strong for India to have its own messenger.
Meanwhile, when WhatsApp updated its privacy policy to share more user data with its parent company Facebook, several messaging apps like Telegram and Signal saw exponential growth in their user base. Whereas, there was no visible growth that the Hike Sticker App witnessed. Regarding this, Mittal also noted that Signal and Telegram unlike Facebook’s products have the “right incentives as entities”. To date, the Hike has raised $261 million as its funding which involves exceptional investors such as Tencent Holdings, Foxconn Technology Group, Bharti Group, etc., and in 2016 the startup was valued at $1.4 billion.
Despite all achievements and shutting down its messaging services, the company shifted from a super app to a multi-app strategy, resulting in two new social products by Hike – Rush and Vibe. Vibe is a social media platform that has evolved from a segment called ‘HikeLand’ within Hike, whereas Rush is a gaming platform offering bite-sized gaming services, such as Carrom and Ludo. As a result, This B2C startup recorded a revenue of $18.8 million in FY23.
KOO
Established in 2015, Bengaluru-headquartered Koo, a social media platform that offers microblogging, started to struggle since the beginning of 2024. Promoted by ministers and celebrities, Koo was initially launched as an alternative to Twitter but by 2023 the startup began to lay off its employees.
In 2024 after being unable to pay salaries to workers with its increasing losses and declining active users Koo’s founders Aprameya Radhakrishna and Mayank Bidawataka announced the news of liquidation through a LinkedIn post, saying “Our partnership talks fell through and we will be discontinuing our services to the public.”At its peak, Koo in the media and entertainment market witnessed 2.1 million daily active users(DAU)and nearly 10 million active users every month(MAU) with a valuation of $274 million as of November 2022.
B2C modeled company Koo raised a total amount of $66.4M over 7 funding rounds while its latest funding round was a series B in 2022 for $11.8M including 15 investors such as Accel, Tiger Global Management, 3one4 Capital, and so on. Founder Aparmeya Radhakrishna and Mayank Bidawatka held the company’s stake by 22% and 1% respectively.
Whereas Accel held 15.7%, Tiger Global held 11.8%, Kalari Capital held 9.4%, 3one4Capital held 9.6%, Blume and IIFL Finance held 5.7%, and 3.3% each of total equity shares of Koo. Meanwhile, this online media startup’s ESOP held a share of 10.6% and the remaining shareholders held a 10.9% stake in the company.
The firm’s annual financial statement according to the Registrar of Companies(RoC) shows that Koo’s operational revenue surged by 75% to Rs.14 lakhs in FY22 from Rs.8 lakhs in FY21 while its losses increased 5.6X to Rs.197Cr. in FY22 against Rs.35.2Cr. in FY21.
Despite initial successes, Koo is currently in a Deadpool stage due to unsuccessful acquisition and funding negotiations. Struggling with financial challenges and a reduced workforce amidst this competitive landscape, Koo – the Yellow Bird ended up bidding her farewell recently.
Mx Takatak and Moj
MX Takatak’s parent company MX Media and Moj’s parent company ShareChat announced the strategic merger between MX Takatak and Moj with their ambition of creating India’s largest short-form video platform in 2022.
Incorporated in 2020, the B2C startup MX Takatak based in Mumbai, generated a revenue of $36.8 million in FY22. On the other hand, Bengaluru-headquartered B2C firm Moj launched in 2020, recorded $89.6 million as its revenue in FY23. These two companies aimed to launch India’s largest short video platform with 300 million monthly active users (MAU), followed by a strong creator community of 100 million, achieving nearly 250 billion monthly video news through their Integrated partnership.
However, two years into the venture, the expected impact has not materialized yet, reflecting the absence of tactical deployment in the case of this merger. Although these two companies came together to establish a significant Indian social media platform, in the end, the initiative couldn’t achieve the intended impact.
ShareChat
Bengaluru-headquartered Indian social media platform ShareChat reportedly laid off 200 workers in December 2023, marking this move as a “strategic restructuring” part of its annual planning for the year 2024. In FY23 this startup saw a 68% increase in revenue from the previous year by generating Rs.540Cr, although the firm faced a significant net loss of Rs.4064Cr. in FY23, surging by 38% from the net loss witnessed in FY22.
The increase in the social media platform’s net loss led to the company’s valuation being cut by Rs.28300Cr. from $5 billion in 2022 to $1.5 billion in 2023. Launched in 2015 this B2C firm raised a total funding of $1.28 billion including investors like Google and Temasek. However, with the layoffs and increase in net loss percentage, the company struggled to raise funds since the investors lost faith in the company, leading to its steadily declining valuation.
Despite India’s massive market potential, Western social media platforms have dominated this landscape, leaving India’s homegrown platforms struggling to compete. The downfall of Indian social media platforms indicates the challenges these homegrown startups face in overcoming Western dominance. However, by learning from past mistakes there is a good scope for Indian innovators to make a more resilient digital environment by promoting digital inclusivity to prioritize users’ needs.
