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BENGALURU : Mohalla Tech, the parent of Moj and ShareChat, is looking to raise more $500 million at a valuation of more than $5 billion as a part of its ongoing Series G funding round, two people aware of the discussions said.

New international investors are also expected to join the round in the coming months, the people said on condition of anonymity. They did not disclose the potential new international investors in Mohalla Tech.

Of this fundraise, Mohalla Tech raised $266 million (around 1,995 crore) on Thursday as a part of the Series G round led by Alkeon Capital at a valuation of $3.7 billion, the company said in a statement. The round also saw participation from Temasek Holdings, Moore Strategic Ventures, Harbourvest and India Quotient.

The company said the latest round of funding will help build capabilities in areas such as social and live commerce, growing its artificial intelligence and machine learning (AI/ML) team, which now comprise more than 100 people across the US, Europe and India.

The round is also expected to fund the acquisition of MXTakaTak, one of the persons said.

“The current fundraise will be used to fuel the acquisition of MXTakaTak, as ShareChat looks to consolidate its play in the short video space. The acquisition deal is expected to be closed in the coming months, post which ShareChat will raise an additional tranche as a part of the ongoing Series G, at over $5 billion valuation," the person said.

Mint first reported about ShareChat acquiring MXTakaTak on 12 October.

This is Mohalla Tech’s third round of funding in 2021 after it turned unicorn in April with funding from Tiger Global. The company has raised $913 million so far this year, and a total of $1.77 billion over eight funding rounds since inception.

The company said it has grown to over 2,000 employees since January. With social and live commerce initiatives, Mohalla Tech is targeting $100 million so-called ‘annualized creator earnings’ by the end of 2023.

“Moj and ShareChat have been growing at an explosive pace. Both our products have been leading the market with the highest monthly active user base, a very active creator set and amazing new partnerships to delight our community. This fresh funding will further strengthen our position and help us deliver immersive social experiences to our community," said Ankush Sachdeva, CEO and co-founder of Moj and ShareChat.

The company declined to comment on the larger fundraise.

ShareChat was founded in 2015 by Farid Ahsan, Ankush Sachdeva and Bhanu Pratap Singh. The firm has been focused on growing Moj as a platform after the ban on ByteDance-backed popular short-video app TikTok in India in June 2020.

Moj has a user community of 160 million and a creator community of more than 50 million. ShareChat has a user community of 180 million and a creator community of more than 32 million, the company said.

In the short-video space, Mohalla Tech competes with VerSe Innovation, the parent company of short-video app Josh and Dailyhunt, and InMobi subsidiary Glance.

In December last year, Glance raised $145 million from Google and PayPal co-founder Peter Thiel’s investment firm Mithril Capital.

Recently, Moj also inked a partnership with Flipkart to allow users to buy tagged Flipkart marketplace products directly from the video screen to tap the live-commerce opportunity.

ShareChat has also been active in making acquisitions. It bought meme-sharing platform Memer, hyperlocal startup Circle Internet, video production firm HPF Films and social commerce platform Elanic.

The short-video category is set to become the second-biggest segment in terms of time spent, after internet giants such as Facebook and Google, according to consulting firm RedSeer. Monthly active users (MAUs) of the segment are expected to more than double to 650 million users by 2025, securing the second spot after television. The growth will be largely driven by 300 million internet users who will be added by 2025, according to RedSeer.

tarush.b@livemint.com

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