When ShareChat and Moj CEO Ankush Sachdeva announced a $502-million fundraise recently, he left out one crucial piece of detail—the name of the biggest investor in the round, China’s Tencent.

The Chinese internet conglomerate and one of the world’s most-valued social media companies had invested over $200 million in the round. Tencent had earlier agreed to invest in ShareChat at a valuation of about $1.2 billion before New York-based Tiger Global Management decided to invest in the same round at a $2.1 billion valuation.

The investment was announced in April, about a year after India introduced restrictions on investments from neighboring countries following border tensions with China. 

That move paused ongoing Chinese investments, such as Ant Financial’s tranches in Zomato and Paytm, and kept out venture capital from the likes of Shunwei Capital and CDH Investments that had been actively backing Indian startups. 

Tencent, though, has been an exception. The firm has deployed over $500 million in both new and existing investments like ShareChat, Flipkart, Gaana and Udaan since the restriction was announced last year. And it is scouting for more bets. 

How has Tencent been able to continue operations in India? And are venture capital firms from China, where technology companies are undergoing a crackdown by Beijing, looking to come back to the India market?

How Tencent Figured it Out

The first investment Tencent made in India after the restriction was announced was a follow-on round in music streaming app Gaana—about $40 million through optionally convertible debt. As this move did not raise any questions, Tencent continued to invest in India.