Google Mulling Investment In India’s ShareChat- Report

Alphabet Inc’s Google (GOOGL) is currently in talks with Bengaluru-based social media company ShareChat over a potential $150M- $200M investment, two people familiar with the matter have told the Economic Times (ET).

According to the report, ShareChat is aiming to raise $150-200 million and is now negotiating with both investors and tech companies. The social media firm is hoping to step into the gap left by banned Chinese apps.

TikTok was recently banned in India as was ByteDance’s Helo. ShareChat boasts a regional language social media platform, says the report, as well as a just-released short-video app called Moj.

“A process is on to raise funds. We have reached out to funds as well as strategic investors like Google. The talks are still at a preliminary stage and will take some time to conclude,” one of the people told the ET. (See GOOGL stock analysis on TipRanks)

“As Chinese tech applications are banned, we expect larger investor traction for ShareChat, which directly competes with ByteDance’s Helo.”

Indeed, Twitter has already invested in ShareChat and a report from Mint suggests that Microsoft is also considering investing. ShareChat’s existing investors including SAIF Partners and Lightspeed Venture Partners may also now ramp up their stakes, a previous ET report revealed.

Meanwhile ShareChat CEO Ankush Sachdeva told ET: “Given how things have changed, especially after the ban, ShareChat benefits a lot in terms of time spent, in terms of revenue, in terms of daily active users. We are suddenly a lot more valuable than our previously thought valuation. We have got a lot of inbound interest and we are talking to everyone, including all the global players.”

Shares in Google are up 12% year-to-date and the stock boasts a bullish Strong Buy Street consensus. That’s with 28 recent buy ratings vs just 2 hold ratings. The average analyst price target of $1,744 indicates shares can rise 16% from current levels.

“We believe Google should be well positioned for the next stage of the pandemic (as suggested by improving 2Q trends), as an array of advertisers, including major online retailers, step back into key variable demand channels and brands return to online video advertising” commented Wells Fargo analyst Brian Fitzgerald, after the company reported ‘solid’ 2Q earnings.