By Aditya Kalra and Aditi Shah
NEW DELHI (Reuters) -The parent company of India's ShareChat has acquired local rival MX's short-video platform in a roughly $700 million deal, two sources told Reuters, as competition heats up in the sector where foreign investors have placed major bets.
The two companies confirmed the deal in a statement but did not disclose financials. Reuters was first to report earlier on Thursday that the two companies had reached a deal.
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 counts Meta Platforms Inc's Instagram Reels as its key rival.
In a cash-and-stock deal, ShareChat's parent entity acquired MX's short-video platform called TakaTak, the sources familiar with the transaction said. The deal is valued at around $700 million, said one of the sources.
In their statement, the companies said the two platforms together will have more than 300 million monthly users and nearly 250 billion monthly video views, creating what they dubbed as "the largest short video platform for Indians."
ShareChat is valued at roughly $4 billion and counts Singapore's Temasek Holdings and Twitter (NYSE:TWTR) among its investors.
ShareChat 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.