Sharechat secures $49 mn via bonds from prior backers
Priyamvada.c@livemint.com 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 toplevel exits, including that of two co-founders, as well as multiple rounds of layoffs amid slowing growth in advertising—a key revenue stream.
Sharechat slashed monthly cash burn by 90% over the past two years and has focused on monetizing its platforms
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.
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.