BackShareChat loss rises 12-fold to ₹415 crore on higher expenses
The startup has 60 mn monthly active users across India and has announced plans to expand its user baseMohalla Tech reported total expenses of Rs440.6 crore in FY19 compared with Rs35.5 crore last year
PremiumBENGALURU : The losses of Bengaluru-based Mohalla Tech Pvt. Ltd, which owns regional language social networking platform ShareChat, have increased dramatically this fiscal over the last year on the back of higher expenses.
The startup, currently valued at $600-650 million, reported a loss of about ₹414.7 crore in fiscal 2018-19, or about 12 times more than the ₹33.8 crore loss it had incurred in FY18. ShareChat’s revenue, though, rose 15-fold to ₹25.8 crore, albeit on a smaller base of ₹1.7 crore last fiscal. This comes against the backdrop of the platform, which has 60 million monthly active users across the country, announcing plans to expand its user base.
Mohalla Tech reported total expenses of ₹440.6 crore in FY19 compared with ₹35.5 crore in 2017-18, according to the registrar of company (RoC) filings procured from business information platform Paper.vc.
Employee benefits expenses increased to ₹29.3 crore from ₹9 crore last fiscal, while depreciation and amortisation expenses rose from ₹16.88 lakh a year ago to ₹39.44 lakh. The company spent ₹410.9 crore on other expenses, a significant jump from ₹26.3 crore in FY18.
This August, ShareChat said it had raised $100 million in its Series D funding round from microblogging site Twitter, among others.
To date, ShareChat has raised $224 million, it said on 16 August. Apart from Twitter, new investor TrustBridge Partners and existing investors Shunwei Capital, Lightspeed Venture Partners, and SAIF Capital, among others, participated in the Series D round. According to Paper.vc, the Bengaluru-based company was valued at ₹3,937.1 crore ($555 million).
ShareChat is probably spending a significant amount on promotion via Google ads, according to Vivek Durai, the founder of Paper.vc.
“They could be spending a lot on Google advertisements. Google has now moved to an Indian entity. The ‘other expenses’ is most likely for online advertising. Earlier, these expenses would come under foreign currency transactions, because we’d pay overseas. Now that all these entities have started invoicing out of India, those are all domestic expenses," he said over phone.
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