Messaging App Hike, the company that touched $1.4 Bn in valuation last year and claims to have over 100 Mn users on its platform, has reportedly started earning revenue in 2015-16 but its bottom line worsened as it burnt more cash than ever.
As per Hike’s filings with the Registrar of Companies, the company has reported revenue from operations of Rs 42.32 lakh for the year through March 2016, reported VCCEdge, the data research platform of News Corp VCCircle.
Founded in 2012 by Kavin Bharti Mittal, son of Bharti Enterprises chairman Sunil Bharti Mittal, and was part of Bharti SoftBank, the joint venture of Bharti Enterprises and Japan’s SoftBank Group Corp. Hike is a peer-to-peer messaging app that uses both data and SMS to deliver messages.
While the app is free, users pay to buy coupons and play games. Coupons generated almost all its operating revenue.
Total income climbed to Rs 34.92 Cr, thanks to a jump in profit from sale of investments to Rs 34.41 Cr from Rs 3.83 Cr in 2014-15. Net loss, however, widened to Rs 217.36 Cr. from Rs 122.36 Cr. as costs climbed. Total costs doubled to Rs 252.3 Cr. from Rs 126.5 Cr.
This is mainly because marketing expenses also doubled to almost Rs 130 Cr. while staff costs soared to Rs 58.8 Cr. from Rs 25.1 Cr.
The company touched a valuation of about $1 Bn in August last year when it raised $175 Mn from China’s Tencent Holdings Ltd, Taiwan’s Foxconn Technology Group and other investors. As of now, Hike has raised four rounds of funding which totals the funding amount to about $250 Mn
Hike claims it has 100 Mn users, 95% of them are in India and transacts 40 Bn messages a month. The platform supports multiple languages, including English, Tamil, Hindi, Malayalam, Gujarati and Bengali.
Facebook-owned WhatsApp is Hike’s biggest competitor. Tencent, which is one of Hike’s investors, had launched WeChat in India in 2012, but didn’t gain much popularity due to competition from WhatsApp.
Hike is yet another Indian company to join heavy losses other than e-commerce firms Flipkart and Snapdeal.