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ShareChat raises $16 Mn additional debt; lays off 5% employees

EntrackrEntrackr · 1y ago
ShareChat raises $16 Mn additional debt; lays off 5% employees
Medial

Mohalla Tech, the parent entity of the vernacular social media platform ShareChat and short video entertainment app Moj, has expanded its debt round to $65 million with $16 million latest infusion from Singapore-based EDBI. In April, ShareChat had raised around $49 million in debt from existing investors including Temasek, Lightspeed, HarbourVest, Moore Strategic, Rimco and Alkeon. The company also saw its valuation nosedived to less than $2 billion from $5 billion during its last fundraise in June 2022. The additional funds will be utilized for advertising company’s tech stack and expand the consumer transactions businesses with investment in newer monetization features, ShareChat said in a press release. A Moneycontrol report also said that ShareChat has let go of 5% of its workforce as a part of its mid-year performance cycle. In 2023, the firm put several cost-cutting measures and sacked 700 employees across two phases. “…some employees are impacted on the basis of performance. This accounts for less than 5% of our workforce. We have a number of open positions and we continue looking for high quality talent across functions,” said a company spokesperson. According to startup data intelligence platform TheKredible, ShareChat has raised around $1.8 billion from investors including Twitter (now X), Alkeon Capital, Moore Strategic Ventures, and Tencent, among others. ShareChat claims that the app is operationally profitable for the past several months, while the Moj app is close to operating break-even. Both apps cater to over 325 million users. While the Ankush Sachdeva-led firm is yet to file its FY24 financials, it spent nearly Rs 4,000 crore in FY23 to earn Rs 533 crore in revenue. Overall, it recorded Rs 3,241 crore loss in FY23. The surge in losses was primarily due to the write-off undertaken by the company for the acquisition of Moj’s competitor MxTakaTak. ShareChat spent nearly $700 million via cash and stock to acquire the Times Internet-backed company.

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Google-backed ShareChat raises $49 Mn debt

EntrackrEntrackr · 1y ago
Google-backed ShareChat raises $49 Mn debt
Medial

Mohalla Tech, the parent entity of the vernacular social media platform ShareChat and short video entertainment app Moj, has raised around $49 million in debt from existing investors. The company has passed a board resolution to issue 4,895 Series I debentures at an issue price of $10000 each to raise $49 million, regulatory filing with RoC shows. Existing investors including Temasek, Lightspeed, HarbourVest, Moore Strategic, Rimco and Alkeon invested in the debt round. Inc42 reported the development first. The fresh funding comes at a time when ShareChat was looking to raise $50 million in a down round to the tune of $1.5 billion. The firm was valued at $5 billion during its last fundraise in June 2022. According to startup data intelligence platform TheKredible, ShareChat has raised around $1.8 billion from investors including Twitter (now X), Alkeon Capital, Moore Strategic Ventures, and Tencent, among others. ShareChat has been eyeing a large equity round but the company is finding it difficult to rope in new and existing backers. It also put several cost-cutting measures and laid off 700 employees across two phases in 2023. The company’s struggle is largely driven by its inability to monetise from the user base which has low-purchasing power. Even after nine-year of its operations, ShareChat had to spend nearly Rs 4,000 crore in FY23 to earn Rs 533 crore in revenue. On a unit level, it spent Rs 7.16 to earn a rupee of operating revenue in the last fiscal. This is one of the highest expense-to-revenue ratios for a unicorn in FY23. The surge in losses was primarily due to the write-off undertaken by the company for the acquisition of Moj’s competitor MxTakaTak. The company spent heavily ($700 million via cash and stock) to acquire the Times Internet-backed company. While ShareChat has almost no competition after the blanket ban on China-origin apps like Bytedance-owned Helo, its short video app Moj competes with Dailyhunt’s Josh, YouTube Shorts and Instagram.

ShareChat cuts 5% jobs as part of performance review cycle

EntrackrEntrackr · 7m ago
ShareChat cuts 5% jobs as part of performance review cycle
Medial

ShareChat cuts 5% jobs as part of performance review cycle Vernacular social media platform ShareChat is reportedly laying off about 5% of its workforce, marking its second round of layoffs in the past six months. In August 2024, ShareChat let go of 5% of its workforce as part of its mid-year performance cycle. In 2023, the firm implemented several cost-cutting measures and sacked 700 employees across two phases. According to Moneycontrol, which first reported the news, ShareChat currently employs between 530 and 550 people, and around 5% will be let go as part of an annual review process set to conclude later this month. Entrackr has reached out to ShareChat for comments. In 2024, the Ankush Sachdeva-led firm raised $65 million in debt across two tranches. ShareChat has raised around $1.3 billion from investors including Twitter (now X), Alkeon Capital, Moore Strategic Ventures, and Tencent, among others. In the last fiscal year, ShareChat's operational revenue increased by 29.9% to Rs 718.1 crore from Rs 552.73 crore in FY23. With a reduction in expenses and moderate growth in scale, the company's losses decreased by 41.4% to Rs 1,898.94 crore in FY24. In 2024, the number of layoffs dropped significantly to 4,700 employees, a sharp decrease from the 24,000 layoffs in 2023 and 20,000 in 2022. With funding recovery underway, layoffs are expected to decrease further in the current calendar year.

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