Social media platform ShareChat’s parent Mohalla Tech is in talks to acquire Times Internet-owned short video app MX TakaTak in a cash-and-stock deal of about $700 million, sources aware of the development said.
Post-acquisition, MX TakaTak’s 180-200 staff will be absorbed by Mohalla Tech, which operates its competitor Moj. People in the know said that an eventual merger of the two brands is inevitable once the deal gets through.
“The deal has been in talks for at least six to nine months. It is happening at a good valuation for Times Internet as well. Times Internet knew that this is the highest they could get with the platform. To move on to the next level, it had to add a lot of money muscle. On the other hand, with this deal, Moj is easily doubling its user base,” a source told BusinessLine.
Emails sent to ShareChat and MX TakaTak went unanswered at the time of publishing.
Doubling user base
Industry experts believe that more than features and functionalities, the deal is about user base consolidation which will eventually attract top content creators, in turn bringing top advertisers.
Sanchit Vir Gogia, Chief Analyst and CEO of Greyhound Research, told BusinessLine, “Moj has about 160 monthly active users (MAUs) and MX TakaTak has about 150 MAUs. On combining these, they would have about 300 million users. Their local competitor Josh has about 115 million. It’s all about volumes and engagement. In the short videos segment, you also have Instagram Reels and YouTube Shorts. And Shorts is doing very well. These apps would need to attract advertising dollars which will be based on the ability of these platforms to attract top content creators.”
Crowded market
The powerful content creators will only go where the number of users are very high. Ultimately, this is going to all about social commerce.
Gogia added, “Moj and MX TakaTak are more relevant in Tier 2 and Tier 3 towns where Instagram Reels and YouTube Shorts are not doing that well. The short video industry is now seeing a crunch. For instance, Chingari started as a short video platform and is now looking into crypto. Mitron TV too was suffering and had to lay off employees.”
According to a report by Redseer, outside the top 50 cities, total MAUs forecasted in CY2021 for shortform videos stood at 170-190 million. Meanwhile, overall organic growth in time spent on shortform video grew 57 per cent as compared to 8 per cent growth for usual social media platforms.
Published on
February 10, 2022
