Social media platform ShareChat has successfully raised $16 million in debt funding from EDBI, a Singapore-based investment fund, bringing the total size of its debt round to $65 million. This development comes amid ShareChat’s ongoing efforts to navigate through a challenging funding environment.
The funds were raised through the issuance of convertible debentures, sources revealed to Inc42. Notably, this marks EDBI’s second investment in an Indian startup, following its earlier investment in home-decor platform Livspace.
Earlier this year, in April, Inc42 had reported that ShareChat raised $49 million via convertible debentures from existing investors, including Lightspeed, Temasek, Alkeon Capital, Moore Strategic Ventures, and HarbourVest, among others.
According to sources, the fresh capital infusion will be utilized to expand ShareChat’s customer transaction businesses by investing in new monetization features for the creator ecosystem.
However, the funding news comes alongside reports of workforce reduction. ShareChat reportedly let go of around 40 employees this week, citing poor performance. While the company did not respond to queries about the debt funding, it confirmed the retrenchment. A company spokesperson stated, “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.”
Founded in 2015 by Ankush Sachdeva, Bhanu Singh, and Farid Ahsan, ShareChat is a prominent Indian social media platform, claiming 325 million monthly active users across its platforms. Its parent entity, Mohalla Tech, operates both ShareChat and the short video platform Moj. ShareChat boasts over 180 million monthly active users nationwide. Moj was launched in July 2020, and in 2022, Mohalla Tech acquired the short video platform MX TakaTak from Times Internet, integrating it with Moj in a deal valued at approximately $600 million.
Facing a funding winter and escalating losses, ShareChat has been on a cost-cutting spree since 2023. Last year, it laid off around 800 employees across three rounds of layoffs and discontinued its fantasy app platform Jeet11 and live commerce business. These measures have reportedly helped the startup reduce its burn rate to below $5 million per month and curb its losses.
ShareChat’s financial reports indicate a 38% increase in net loss to INR 4,064.3 crore in the financial year 2022-23 (FY23), compared to INR 2,941.5 crore in FY22. However, the company’s revenue rose by 62% to INR 540.21 crore from INR 332.69 crore in the previous fiscal year.
Adding to its challenges, two co-founders, Bhanu Pratap Singh and Farid Ahsan, resigned last year and subsequently founded a robotics startup named General Autonomy, which raised $3 million in seed funding from venture capital firms India Quotient and Elevation Capital in November last year.
To date, ShareChat has raised over $1 billion in funding and is backed by prominent investors such as Google, X (formerly Twitter), Tiger Global, and Tencent.
