Shubham Saroj
The story of how Hike Messenger changed its Business Model
Introduction – Hike Messenger was India’s answer to WhatsApp. It showed that India can also develop a messaging app that’s equally robust and precise or maybe even better than its foreign counterparts. It was released in December 2012 and it’s available on both Android and iOS.
It was founded by Kavin Bharti Mittal and is headquartered in New Delhi, India. It’s a messaging app that also allows video chat, image sharing, multimedia and voice over IP.
Hike can also work offline through SMS and has multi-platform support. It had many features such as news, mobile payments, games and jokes but was later discontinued. It gave people the ability to hide their private chats with a password, and express their messages with regional and localized stickers in their native languages.
The app registration uses standard one time password (OTP) based authentication process. Today we will talk about where it stands and what the future holds for it.
Early Days – Kavin Bharti Mittal is the son of Sunil Bharti Mittal (Chairman of Airtel Limited) and the CEO of Hike Messenger, which is the world’s 6th largest mobile messaging application. He has a master’s degree from the Imperial College London and worked as an intern at McLaren Racing, Google and Goldman Sachs while he was studying in London.
Before starting Hike, he founded an app company called AppSpark and made a movie-ticketing app called MoviesNow for iOS which was in collaboration with moviestickets.com.
Then on 12/12/12, he founded Hike Messenger with initial funding from various investors. Within 3 years, Hike had grown to become the largest Indian internet company by users with a total of 100 million users. By July 2014, it was the most downloaded application on both the India’s Apple app store and the Google Play store.
Marketing Strategy – There were various marketing strategies used by Hike such as:-
- Rewards for signing up
- Rewards for referring the app to your friends and family
- They used TV ads to woo customers to use their app and they convinced that Hike was an Indian app
In August 2013, Hike launched its first-ever digital campaign which ran under the banner “keep your friends close”. The advertisement was a big hit and the users took it very well. Kavin knew that the key to any successful business is customer satisfaction. Hence the team started taking in real-time feedback from the users for further and better development of the product.
What also worked well for Hike was their tie-up with Airtel. They ran a scheme that if the user had an Airtel postpaid connection in India, they would be given free data for three months for using Hike Messenger. This campaign gave Hike the needed hike in their consumer base.
Hike also tied up with various brands like Dominos, CCD and Pizza Hut for discount coupons. This intrigued the actual customers and brought potential customers on board. With all these creative marketing strategies, Hike gained a base of 15 million loyal customers in just 1 year of inception.
User Base & Valuation – In total Hike has more than 100 million registered users across all platforms. It acquired its first 5 million users within 3 months after the app launch. Then they went onto increasing their user base with time. Here are some statistics with timestamps:-
- 15 million by September 2013
- 20 million by May 2014
- 35 million by August 2014
- 70 million by October 2015
- 100 million by January 2016
As of December 2019, the app has over 2 million weekly active users. It has a valuation of more than $1.4 billion and thus it became the fastest Indian startup and the only free application among the lot to be valued over $1 billion.
Funding – Hike has raised a total of $261 million in funding over 5 rounds. They have a total of 10 investors of whom 4 of them are lead investors. Their latest round of funding was held on August 16, 2016.
The investors are as follows:-
- Tencent Holdings
- Bharti Enterprises
- SoftBank
- Foxconn Technology Group
- Tiger Global Management
- Matt Mullenweg
- Aditya Agarwal
- Ruchi Sanghvi
- Devon T Rogers
Revenues & Losses – Hike Messenger had total revenues of Rs 26.5 crores in FY19. They also reported a loss of Rs 205.6 crores. It’s a drop of 106%, as compared to a loss of Rs 423 crores it incurred in FY18. The revenues were also dropped by a decline of 33% from Rs 39.5 crores in the FY18.
Acquisitions & Investments – So far Hike has acquired 3 startups. They are as follows:-
- CREO on August 2017
- InstaLively on June 2017
- Thought Mechanics on January 2015
Hike has also invested in a startup named WinZo on February 2019. The investment was valued at $5 million.
Controversies – Around January 2016, Hike spokesperson told Press Trust of India journalist that Facebook blocked an option in its advertisements which allows people to visit the Hike official website which they assumed to be an initial technical glitch, but later Facebook confirmed that certain products and services can’t be advertised on its platform which stopped the Hike ads.
Facebook has not publicly responded to Hike’s allegations whereas it’s worth noting that Facebook-owned WhatsApp is the rival service to the Hike messaging app in the Indian market and if Hike’s allegations are right then Facebook might have deliberately done this.
On April 1, 2014, the app pranked its users with “HikeCoin“, which was modeled after Bitcoin for direct cash transfers by announcing that a photo of real monetary note, attached and sent to friends would make the physical note invalid. It wasn’t real and was simply an April fool’s prank.
2 years later, on March 31, 2016 Hike announced “Hike Smell“, a fictional feature added as a prank on April fool’s Day. Users were informed that by using special sensors in their smartphones, they could capture and attach smells to their messages.
Although these pranks were taken in good light and didn’t create any major controversy.
Present Conditions & Future Goals – On January 6, 2021, Hike informed its users that it will be shutting down its messenger and were given a deadline till January 14 to migrate their data. Kavin Mittal didn’t give a reason for shutting down the service, Mittal tweeted that global network effects are too strong for India to have its own messenger.
Basically, he wanted to say that people in India are already using messaging apps like whatsapp and telegram and it will be very tough to take a good market share from them. Although we believe, now could have been the time when an Indian messaging app could have been the talk of the town when whatsapp has been accused of sharing user data with Facebook without our approval.
It’s sad that they have shut down their services as a messaging app but if you think they’re over then you’re wrong as they have some other plans. Hike Messenger has introduced a new offering called HikeLand which is a mobile virtual world where people can participate in many activities.
HikeLand allows users to hang out with their friends and watch videos together in a virtual environment. The move has come when sharing experiences via social networks has strengthened due to people staying at homes. The early preview of HikeLand includes two shared experiences – ‘Home’ and ‘Big Screen’.
It explained that the home screen will be only for the user themselves, more like a private space. In this mode, users can watch YouTube videos and talk about it with another user. There will be eight themes to choose from and the home screen can be customized depending on the likes of the user. No one who is uninvited can enter this room.
Big screen, on the other hand, is unlike Home and is more open. Hike’s Big Screen allows users to watch videos with other people. To start with, Big Screen is currently powered by YouTube and would be running shows 24×7 around comedy, sports, and others. Users that enjoy similar content can be a part of it. While viewing the show/video of choice, users can find out more about others watching the same content through their profiles and even message them.
“With advancements in technology, so much is possible today that wasn’t even just a few years ago. The world has evolved; it’s time for social products as well. With HikeLand, we’re launching the world’s first mobile-first Virtual World. A brand new take on how people can hangout online, transcending beyond the limitations of the offline world”, Hike founder and CEO Kavin Bharti Mittal said.
The company said HikeLand is a homegrown product that has been built from the ground up keeping India in mind. “It is an India-first product built for a mobile-first/mobile-only audience. Leveraging diversity of art skills and resources, HikeLand also brought together a design team of not only UI (user interface) and UX (user experience) but also fashion, art, and 3D artists”, it added.
Conclusion – As of 2021, Hike Messenger has been closed and completely revamped and changed its business model. It might have been the next big thing as a messenger but I think it was a right move to pivot to something more than just being another messenger in the marketplace.
Now they have the ability to differentiate themselves and stand out in the crowd as a first mover. Only time will tell what will in the future. If something exciting happens, we will cover it up. Hence, stay tuned and keep coming back to StartupTrak for more startup stories.
