India’s newest unicorn is no regular startup.
On Aug. 16, four-year-old instant messaging platform Hike Messenger announced that it had raised $175 million, at a valuation of $1.4 billion, becoming the latest entrant to the club of startups valued at over $1 billion. The round was led by Chinese internet giant Tencent Holdings and manufacturing firm Foxconn Technology Group. Existing investors SoftBank, Bharti group, and Tiger Global, too, participated in the funding.
Unlike most Indian tech startups, Hike Messenger was not the brainchild of a first-generation entrepreneur who quit his cushy job and risked all his savings.
The firm was founded by 28-year-old Kavin Bharti Mittal, one of the twins of Sunil Bharti Mittal, founder and chairman of Bharti Enterprises. Sunil is India’s 13th-richest man and leads the world’s third-largest telecom firm by subscribers.
Hike Messenger’s relation to Bharti Enterprises doesn’t end there. The startup’s first two funding rounds—totalling $21 millon—were raised from Bharti Softbank, a joint venture between Bharti Group and Japan’s Softbank.
The Mittal scion’s achievements could be linked to his lineage, and he does not hesitate in accepting that he has a “unique, unfair advantage.”
In a conversation with Quartz, Hike Messenger’s founder and CEO spoke about the merits and demerits of being a second-generation entrepreneur, his belief in Zen Buddhism, and friendships with fellow entrepreneurs. Edited excerpts:
You don’t fit the description of an average Indian entrepreneur. Are things different for you?
I would be lying if I said no. There are advantages and disadvantages for me.
The advantage is that having been exposed to a lot of business-related stuff at a very early age, you end up subconsciously learning a lot.
The disadvantage is that the expectations from me are very different. Earlier, everyone used to ask me when I am joining Bharti Group. I didn’t worry about that and built something that I was passionate about. Now there are different kinds of pressures.
Everyone had their eyes on me from very early on. Most entrepreneurs have a cover for the first couple of years because they are a nobody at that stage. That lets you experiment, try, and fail. But that never happened for me.
But weren’t the advantages much bigger? You had investors like Bharti Softbank right at the start.
Absolutely, I did. That is why my ambitions are very big. It doesn’t matter whether you run from zero to one or one to 1,000.
There is no doubt that there are advantages and I think it’s great. Having a unique unfair advantage is something that everybody should exploit in their lives in whatever form or fashion. Why not?
I won’t say access to capital is one of the advantages because that has a lot to do with merit, but having access to people lets you think bigger. But you must also realise that there are people out there who were not in my position but they’ve done bigger, like the Flipkarts and Snapdeals. I am sure they had their own small, unfair advantages.
Are you friends with any other Indian entrepreneurs?
Oh yes. Sachin (Bansal of Flipkart), Kunal (Bahl of Snapdeal), and Bhavish (Aggarwal of Ola) are all good friends.
Kunal’s environment or Sachin’s environment or my environment is unique and that is why we all bring unique perspectives to the table when we chat.
Do you feel failure would be okay?
I think everybody worries about failure.
If all this stuff doesn’t work out, you will see me pack up my bag and go to a beach and chill. If all this stuff doesn’t work out, you will see me pack up my bag and go to a beach and chill. Having had the opportunity to be exposed to multiple cultures and different people, you realise that the world around you is simply an illusion of your thoughts. It’s your perspective that’s real and that’s all that counts.
That’s just a philosophical thought…
I am into Zen Buddhism. This is what it talks about. There’s something called absolute truth and relative truth in Buddhism. You can’t argue about the absolute truth but you can’t be so sure about relative truth. Most of the world today runs around relative truth—perspectives of people. Once you realise that the world functions like that, everything changes.
But do you think an average Indian entrepreneur would have the privilege to pack his or her bags and go to a beach after failing?
If you talk to the best entrepreneurs, they will tell you that it’s not about the fame or the money. It’s about having made an impact. I think any of us can pack our bags and go live on a beach, but I don’t think any of us would do it.
So, even if all our companies collapse some day, you will see us all start other companies because what drives us is making an impact.
Does all the news about poor investor sentiment bother you?
I am actually glad that it’s happening. We had the big, first investment cycle in 2014 when a lot of people just put money in businesses that may have had no foundation or fundamentals. I really feel that hard times are very important to witness and go through for us to build a successful business.
Hike was close to shutting down twice—in March 2013 and sometime again in 2014—because of low traction and usage. But we overcame that, and once you’ve seen that, you value what you have much more.
How did you manage to raise your recent round despite poor investor sentiment?
There is money in the market for those who are starting up with good ideas and strong pedigrees. There is also money for those startups that are doing well.
We have established ourselves as the second-biggest messaging app in the country. The realisation among Tencent and Foxconn is that to build messaging as a platform service, you have to take a long-term view. They have seen that in China. So they were interested in us.
Also, at a time when startups are struggling to justify their valuations, you have managed to become a unicorn. How?
First thing is the uniqueness of our business. Nobody else in this country is doing what we are doing. Also, the fundamentals of our business are strong, in terms of spending, growth, and quality of product. The potential of our market is great. So all this combines to give us a great valuation.
What makes you feel that you are uniquely positioned, given that WhatsApp is on every phone in the country?
That’s actually not a bad thing because WhatsApp is the first step into messaging. Hike is not just about messaging but about much more like stickers, privacy, news, scores, games, etc. So we believe both apps will grow.
For us to win, WhatsApp does not have to lose.
Why would someone have two messaging apps on his or her phone?
Because the two apps do different things. If you want a simple SMS replacement, you will use WhatsApp. However, if you want to do much more with your friends than simple text and photo share, you’ll come to Hike.
What is your active userbase right now?
We don’t talk about it just yet. All that we can say is that we have over 100 million registered users.
What’s your benchmark for success?
The benchmark keeps shifting. I can only give you an abstract answer and say that having an impact on enough people—and I don’t have a number for that—through something like Hike is a benchmark.
Only time will tell if we are successful in doing that. But I am only 28 years old, which is less than 30%-40% of my life, so I have a long way to go. There’s a lot to look forward to.