Emerging Messengers

The number of messengers with 100+ million users are a handful. Whatsapp and Facebook Messenger have each over 1 billion users, Wechat has 806 million, Skype has over 300 million, and Snapchat, Viber and Line each have over 200 million monthly active users.

Leading Messengers

Source: Company announcements, GSV estimate

In India, a home-grown startup is showing strong traction with now over 100 million users. Hike, a 4-year old, New Delhi-based startup, raised $175 million from Tencent, Foxconn, Tiger Global and SoftBank last week. The new funding values Hike at $1.4 billion, and should boost its competitive strength at home.

Similar to other platforms, Hike aims to evolve from a pure messaging app to a broader social media platform. Besides messaging, users can make calls, chat in groups, share photos and files, use filters, follow sports, etc. With 95% of its 100+ million users located in India, Hike is the largest communication platform in that country, slightly ahead of Whatsapp’s 70+ million users there.

Hike had 35 million users two years ago, and 70 million users in October 2015. With 100 million users now, Hike’s user growth is strong at ~36%, which is above Line’s growth rate but significantly below Snapchat’s. (Disclosure: GSV owns shares in Snapchat).

Hike Users

Source: Hike announcements

Hike users currently send 40 billion messages per month, which compares to Whatsapp’s ~40 billion messages sent per day. And at a size approximately 10x larger that of Hike, pegging Whatsapp’s valuation at $50 billion wouldn’t be much off.

Engagement on Hike is good but not great. Users spend 120 minutes per week, and assuming the average person uses the app just over 6 days a week, this implies 20 minutes on a daily basis. As a reference, Snapchat and Facebook users spend close to 30 minutes per session, on average!

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Tencent meanwhile reported spectacular second quarter results, with its flagship app Wechat growing 34% to 806 million. With that, Tencent moved to overtake Alibaba as China’s largest tech company, now worth $245 billion.

Wechat has among the highest engagement metrics, with its daily active users over monthly active users (DAU/MAU) ratio in the 90% level. Whatsapp, Snapchat and Slack are the only other social apps with DAU/MAU ratios at 65% or more. In China, Wechat is not only a messaging app, but an email replacement, a social network, a gaming platform, a payment service, a file sharing app, etc. In a stark contrast to elsewhere in the World, Chinese businesses primarily use Wechat for communication, and only occasionally use email.

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Snapchat made headlines last week, with its acquisition of mobile search app Vurb. With Vurb’s discover engine, Snapchat could make it easier for users to find and follow accounts — one of the more difficult tasks for new users on Snapchat. Vurb is primarily a discover engine tailored for the mobile experience. It is a hybrid between social media and search, and it connects searches with other apps like Yelp, Fandango, Google Maps, Lyft, etc. (Disclosure: GSV owns shares in Lyft).

Source: Vurb

Vurb was founded in 2011 and is based in San Francisco. Its founder Bobby Lo is expected to stay at Snapchat, and the two companies combined efforts should help Snapchat grow its platform power.

As published in this week’s A 2 Apple: http://www.a2apple.com/olympics-reality/

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