Asia's tech titans are piling into India's unicorns. WhatsApp rival Hike Messenger is the latest to join a handful of local startups with a value in excess of the mythical $1 billion. China's Tencent and Taiwan's Foxconn led a $175 million fundraising for the app, which allows users to send each other Bollywood-themed stickers and hide conversations from prying parents. Even as the global venture capital market gets more challenging, giants from the Far East are racing to dominate a market that offers both exceptional size and openness.
Hike's new $1.4 billion valuation means the messaging app, which launched in 2012, joins the ranks of ride-hailing app Ola, e-commerce players Snapdeal and Flipkart, food delivery company Zomato, and mobile wallet provider Paytm. Even now, India still has less than ten unicorns. China has more like 50, according to data compiled by TechCrunch.
Unlike Western rivals such as Amazon and Uber, which are trying to dominate the Indian market themselves, Asian players are mostly throwing cash at local rivals to enter through the back door. Tencent, for example, appears to have abandoned the effort to roll out WeChat in India and is now putting its weight behind a local rival to conquer the market for messaging.
Elsewhere, Japan's SoftBank - an early investor in Hike - is a major shareholder of Ola. The Japanese internet conglomerate, Chinese e-commerce giant Alibaba and Foxconn are all big backers of Snapdeal. Meanwhile, Alibaba and its payments affiliate Ant Financial are the largest investors in Paytm.
Pumping money into India, a market where absolute valuations remain small, is a low risk, inexpensive way to bet on a market with enormous growth potential. Venture fund Kleiner Perkins Caufield & Byers reckons that, excluding India, global internet user growth would have slowed last year. India is also relatively open, which should make it possible for foreign-backed groups to thrive in a way that it is not usually possible in China. The global tech climate may be cooling but Asia's giants are determined to keep a firm grip on the region's startups.
(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)