The TikTok Saga - A Thread:
India banned TikTok overnight, claiming it to be prejudicial to the security of the State. $6 Bn dent on ByteDance (parent company of TikTok)
Co-founder of Indian Startup Chingari (alternative of TikTok) shared the spike in user engagement after ban of TikTok:
- Within 1 hour of TikTok ban, Chingari saw 1 lakh downloads
- Chingari is getting 10 lakh views per 30 minutes
USA President Donald Trump (visibly inspired by India) said that he would ban TikTok sometime soon, over security concerns. TikTok’s spokesperson appealed (in vain) that they have hired close to 1000 Americans and all their data is stored locally in the USA.
Microsoft revealed that it is in talks with TikTok to buy its U.S. Operations (Microsoft can help TikTok with its Azure cloud platform).
Trump administration passed an executive order banning transactions with TikTok and WeChat (which will basically make them defunct), if it is not sold within 45 days.
TikTok sued the U.S. Government for its unfair executive order, with hopes that the entire process could be stalled till November 3 elections.
While Chingari will take some sweat to reach the 120 Mn monthly active users mark (TikTok India’s user base in June’19), if it spends enough time without a competition, they may reach a point from where there is no return. Therefore, TikTok needs to act on war footing to regain access to Indian market. We believe this could come in any of the following ways:
If Microsoft pulls out some more billion dollars out of its $137 BILLION cash reserves to buy TikTok India also. 7 Aug’20: Reports surfaced that Microsoft is considering purchasing the entire Global Operations of TikTok.
If Reliance Jio, which appears to be the only Tech giant of India, buys TikTok India operations. 13 Aug’20: News surfaced that Reliance Jio is in talks with ByteDance to buy TikTok India at around $3 Bn.
If TikTok decides to invest in local servers and stores all its data locally in India and also is able to convince GoI that it is not taking any data outside the country (Teaser: exactly 1 year ago, Jio announced that it will develop data centers in India that will run Azure cloud platforms).
The founders of short video platforms of India are well aware of the stakes in hand and have turned active in raising funds to initiate blitz-scaling and acquire the market ASAP:
Chingari raised $1.3 Mn in seed round, led by VCs including AngelList India, Utsav Somani's iSeed, Village Global, LogX Ventures, and Jasminder Singh Gulati of NowFloats. It also won INR 20 lakh in the Aatmanirbhar Bharat App Innovation Challenge (Social category). It has also raised an undisclosed amount from Tinder CPO Brian Norgard and OLX founder Fabrice Grinda.
launched its short-video sharing platform Moj a day after the Govt announced TikTok ban. As reported by BT on 27 Aug’20, interestingly, Microsoft has shown interest to invest upto $100 million in the startup.
This article is a part of the August'20 edition of our Startup Newsletter. Here's the complete publication: