The parent company of ShareChat will acquire MX's short-video platform in an around $700 million (Rs 5,245 crore) deal, two sources told Reuters, as competition heats up in the sector where foreign investors have placed major bets.
Indian short-video apps have become popular since New Delhi banned ByteDance's TikTok and some other Chinese apps in 2020 following an India-China border clash.
After TikTok was banned, ShareChat's parent entity, Mohalla Tech, launched a similar short-video sharing app named Moj, which has over time garnered 160 million users and counts Meta Platforms Inc's Instagram Reels as its key rival.
In a cash-and-stock deal, ShareChat's parent entity will acquire MX's short-video platform TakaTak, the sources familiar with the discussion said.
The deal, valued at around $700 million, could be announced within days, said one of the sources. Reuters is first to announce the two sides have reached a deal.
ShareChat, which is valued at roughly $4 billion (Rs 29,975 crore) and counts Singapore's Temasek Holdings and Twitter among its investors, declined to comment. A spokesperson for MX said she did not have any immediate comment.
With the MX TakaTak acquisition, ShareChat's parent will now have two short-video apps in its portfolio.
The company has plans to deepen its use of artificial intelligence tools and reach a much wider audience as Moj has roughly 160 million users in India, while MX has roughly 100 million, said one of the sources.
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