ShareChat raised the funds by issuing convertible debentures to Singapore-based fund EDBI, which is a new investor in the startup
In April, Inc42 exclusively reported about ShareChat raising $49 Mn via convertible debentures from its existing investors Lightspeed, Temasek, Alkeon Capital, among others
ShareChat also let go of around 40 employees earlier this week, citing poor performance
Social media platform ShareChat
has raised $16 Mn debt funding from new investor, Singapore-based fund EDBI, expanding the size of its previous debt round to $65 Mn, sources said.
The Google-backed startup, which has been battling a funding crunch, raised the funds by issuing convertible debentures, the sources told Inc42.
This is EDBI’s second investment in an Indian startup. Earlier, it invested in home-decor startup Livspace.
In April this year, Inc42 exclusively reported about ShareChat raising $49 Mn via convertible debentures in a funding round from its existing investors Lightspeed, Temasek, Alkeon Capital, Moore Strategic Ventures, HarbourVest, among others.
As per the sources, ShareChat will utilise the fresh capital to expand its customer transaction businesses by investing in new monetisation features for the creator ecosystem.
Besides, Inc42 has also learnt that ShareChat let go of around 40 employees this week citing poor performance.
While ShareChat didn’t respond to Inc42’s queries on the debt funding, the startup confirmed the retrenchment. “We have launched our mid-year performance cycle and as a usual practice, 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,” a company spokesperson said.
Founded in 2015 by Ankush Sachdeva, Bhanu Singh, and Farid Ahsan, ShareChat is an indigenous social media platform which claims to have 325 Mn monthly active users across all its platforms. The parent entity, Mohalla Tech, runs two platforms – ShareChat and short video platform Moj. Currently, ShareChat has over 180 Mn monthly active users spread across the country. ShareChat launched Moj in July 2020. Later in 2022, Mohalla Tech acquired another short video platform MX TakaTak from Times Internet and integrated it with Moj. The deal was pegged at around $600 Mn.
Amid the ongoing funding winter and rising losses, the startup has been on a cost-cutting spree since 2023. It laid off around 800 employees in three layoff exercises last year and also pulled the plug on its fantasy app platform Jeet11 and live commerce business.
These efforts have helped the startup bring down its burn rate to below $5 Mn per month and cut its loss, the sources said.
ShareChat’s net loss grew 38% to INR 4,064.3 Cr in the financial year 2022-23 (FY23) from INR 2,941.5 Cr in FY22. Revenue rose 62% to INR 540.21 Cr from INR 332.69 Cr in the previous fiscal year.
Besides the layoffs, two cofounders of the startup – Bhanu Pratap Singh and Farid Ahsan – also resigned last year. Following this, they founded a robotics startup General Autonomy and raised $3 Mn seed funding in November last year from venture capital firms India Quotient and Elevation Capital.
Overall, ShareChat has raised a funding of over $1 Bn till date and counts the likes of Google, X (erstwhile Twitter), Tiger Global, and Tencent among its backers.
