The deal is structured this way: MX Media, the parent firm of MX Player and MX TakaTak, and its shareholders are becoming strategic holders in ShareChat’s parent firm Mohalla Tech. The size of the deal is about $900 million and it includes both cash and equity, a source familiar with the matter told TechCrunch.

“This strategic partnership will enable both MX Media and ShareChat to further benefit from the synergies between long-form and short form, at a significantly larger scale, in an accelerated manner,” the two firms said in a joint statement. They did not disclose the terms of the deal.

Their merger is the strongest sign of a broader consolidation that is about to hit the short video apps market in India.

After New Delhi banned TikTok in mid-2020, scores of local startups launched their own offerings to cash in on the vacuum the Chinese app left in the world’s second largest internet market. TikTok was reaching over 200 million users in India prior to its ban and identified the South Asian nation as its largest overseas market by users count.

DailyHunt, a news aggregator, and advertising giant InMobi are two other large players that are currently operating in the Indian short-video space.

“I am excited to announce the strategic merger of India’s two most popular social media platforms. MX has always strived to build superior world class products, and Takatak is no exception,” said Karan Bedi, chief executive of MX Player in a statement.

“This combined with Moj’s AI and execution capabilities makes the combined business a truly world class short video platform. MX has created two ‘unicorns’ within one business, unlocking significant value for our shareholders, and will now continue to double down on OTT, with significantly increased financial resources.”

MX TakaTak will continue to operate as a separate platform for now, but the two apps’ creator bases, content supply, and recommendation algorithms may integrate eventually, the firms said. A decision on whether one of the apps will absorb the other or if they should continue to co-operate in their current avatars hasn’t been taken and may take up a few months, the source familiar with the matter said.

The combined short-video app will have over 100 million creators and reach more than 300 million monthly active users, the firms said, without saying whether they factored in any overlaps.

“We at Mohalla Tech are building India’s largest AI-powered content ecosystem which has been on an unprecedented growth trajectory,” said Ankush Sachdeva, co-founder and chief executive of ShareChat, in a statement.

“MX TakaTak is a popular platform and this merger further solidifies our position in the short video ecosystem. With this development, we aim to build the largest original content platform on Moj along with the largest community of users across India and reach over 300 million MAUs by the end of 2022.”