A significant revenue stream continues to elude messaging app operator Hike Pvt. Ltd, even as its losses nearly doubled in the financial year 2017-18.
The Kavin Bharti Mittal-led unicorn posted net losses of Rs 399.6 crore in 2017-18 compared with Rs 212.7 crore in the previous fiscal, show filings with the Registrar of Companies (RoC).
After generating zero revenue from operations for the financial year ended March 2017, it earned Rs 50.9 lakh in operational revenue in 2017-18.
This figure is higher than Hike’s first-ever operating revenue of Rs 42.32 lakh in 2015-16. Coupons that users bought to play in-app games accounted for almost all the operating revenue for that fiscal.
Hike does not charge consumers nor does it support advertising.
Other income, which includes profit from sale of mutual funds, was Rs 38.76 crore. Overall, the company’s total income in 2017-18 increased by a fifth to Rs 39.64 crore.
Hike’s net expenditure also rose significantly, increasing to Rs 439.9 crore in 2017-18 from Rs 245.67 crore in the year before that.
Delhi-headquartered Hike pitches itself as a messaging app focussed on privacy and expression for those who don’t want to be part of public social networks.
In May this year, Hike had laid off several of its 350-plus employees and shut its Bengaluru operations. At the time, Mittal said the moves were part of efforts to focus on its core offering of a messaging platform.
A number of the pink slips were reportedly handed out to staffers of Hike’s two acquisitions - social networking app Pulse and Creo, the maker of HDMI media streaming device Teewe.
Hike’s biggest competition is Facebook-owned WhatsApp, which has more than 200 million users in India. Hike had 100 million registered users in 2016, with its latest user base statistics not available. It has not raised fresh funding in more than two years.
The company had touched a valuation of $1.4 billion in August 2016 when it raised $175 million (Rs 1,170 crore then) from China’s Tencent Holdings Ltd, Taiwan’s Foxconn Technology Group and other investors.
This was the fourth funding round for Hike, and took the total it had raised so far to $250 million. It had previously raised capital from US hedge fund and venture-style investment firm Tiger Global.
Founded in July 2012 by Kavin, son of Bharti Enterprises Ltd chairman Sunil Bharti Mittal, it was part of Bharti SoftBank — the joint venture between Bharti Enterprises and Japan’s SoftBank Group Corp.
The peer-to-peer messaging app supports multiple languages, including English, Tamil, Hindi, Malayalam, Gujarati and Bengali.
Hike had last year expanded its digital wallet offerings by adding services such as cab, bus and train bookings as well as payments for movie tickets and bills. It had launched its wallet in June 2017.