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Business News/ Companies / Sharechat raises $49 million via convertible debentures from existing investors

Sharechat raises $49 million via convertible debentures from existing investors

The social media platform will invest the money on its ad targeting technology and to improve consumer transactions on Sharechat as well as its short-videos platform Moj

Sharechat has been grappling with faltering ad revenues and top-level exits, including that of two co-founders.Premium
Sharechat has been grappling with faltering ad revenues and top-level exits, including that of two co-founders.

BENGALURU:Social media platform Sharechat has raised $49 million via convertible debentures in a round led by existing investors including Lightspeed, Temasek, Alkeon Capital, Moore Strategic Ventures and HarbourVest.

"The new funds will be utilized to bolster our robust monetisation plans and propel us on our path to break-even and beyond," co-founder and chief executive officer Ankush Sachdeva said in a statement on Monday.

Specifically, the company will use the money on ad targeting technology as well as improving the growth of its consumer transactions business on Sharechat and Moj’s live-streaming platform.

Mohalla Tech Pvt. Ltd, which operates Sharechat and short-video platform Moj, was valued at $5 billion when it raised $300 million in funding in May 2022 from Alphabet Inc.’s Google and Singapore’s Temasek Holdings, among other investors.

Sharechat is dealing with faltering advertising revenues as companies globally have slashed budgets and reduced marketing expenses owing to macroeconomic uncertainties and geopolitical tensions. 

In the last few years, Sharechat has also seen top-level exits, including that of two co-founders, as well as multiple rounds of layoffs amid slowing growth in advertising—a key revenue stream.

In FY23, Mohalla’s loss widened 72% to 5,144 crore, as per the company’s latest filings sourced from Tofler. Total income, however, grew 71% to 718 crore.

Also read: Sharechat and Moj are floundering. Can the businesses be fixed?

The company says it has reduced monthly cash burn by 90% over the past two years and has focused on monetizing its various platforms, contributing to the increase in revenue. 

Sharechat has also diversified its monetization avenues in areas such as virtual gifting, the company said in the statement. 

It added that it has expanded its ESOPs pool by setting aside 3.5% of the cap table to be disbursed as bonus grants, Sachdeva said in the statement, adding that this will double employees’ total ownership in the company.

"We wanted to recognize their efforts and incentivize our teams to continue this momentum and push the company to profitability in the next 4-5 quarters and then to IPO," he said. 

Sachdeva added that the company is targeting overall profitability in the next 12 months. Sharechat became profitable in October and Moj is expected to become profitable by June, according to the company.

Founded in 2015 by Sachdeva, Bhanu Pratap Singh, and Farid Ahsan, Sharechat was started with the aim of offering users content in regional languages. It launched Moj five years later after the Indian government banned Tiktok. 

With over 325 million monthly active users across its platforms, Sharechat has also acquired a string of companies, including Times Internet-backed MX Taka Tak, short-video app Clip, and fashion peer-to-peer marketplace Elanic.

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Published: 15 Apr 2024, 05:43 PM IST
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