Tencent backs Indian social media Lokal
Indian hyperlocal social media platform Lokal has raised $12 million in a new round of financing led by Chinese internet conglomerate Tencent, according to a source familiar with the matter.
Existing investors 3one4 Capital, Y Combinator and India Quotient have also participated in the Bangalore-based startup’s Series A, the source said, requesting anonymity as the matter is private.
Tencent and Lokal did not respond to a request for comment.
According to estimates, there are over 400 million non-English speaking Indians who are online today. For them, the internet’s offerings are very limited as there aren’t many services that have been built to serve such users -- and many don’t have any offering for such large masses at all.
Lokal is attempting to reach these users and provide them with a broad range of services. Its eponymous hyperlocal social media app enables non-English speaking users to connect and interact with one another.
The app also helps users find jobs in their vicinity and keeps them up to date with things such as commodity prices, real estate prices and matrimonial ads that you would otherwise find in local newspapers. Its offerings also include upskilling services.
The startup says on its website that it has amassed over 10 million downloads and is popular in several states in South India.
The new investment comes more than a year and a half after New Delhi introduced rules to require that Indian firms take its approval before raising capital from a Chinese investor. The move significantly slowed down Chinese firms' investment pace in India. But in recent months, several firms have raised from Tencent.
TechCrunch reported in August that India's Pocket FM was in advanced talks to raise a round from Tencent and others. The Chinese giant, which has invested over $2 billion in Indian startups since 2016, also invested over $200 million in Indian social media platform ShareChat earlier this year, though the startup didn't disclose Tencent's involvement at the time of announcement.
The firm, which also poured in more money in Indian music streaming service Gaana, has made several recent investments in Indian firms as convertible debts to buy the parties time for approval and give Tencent the option to convert its debt into an equity investment in future.
