ShareChat will break even in a few years: Founder-CEO Ankush Sachdeva

In a Q&A, Sachdeva also dwells on his company's monetisation plan, and the strategy behind the $700 mn acquisition of short video platform MX TakaTak

Vernacular social media start-up ShareChat entered the short video fray with the Moj app in 2020 after TikTok was banned in the country, along with other Chinese apps. Earlier this month, the company -- which has so far raised $1.177 billion in funding was valued at $3.7 billion in its last round of fundin -- acquired short video app MX TakaTak in a $700 million deal. Co-founder and CEO Ankush Sachdeva spoke to Deepsekhar Choudhury about the road ahead for the company. Edited excerpts:

What was the strategy behind the $700 million acquisition of short video platform MX TakaTak?

A lot of work, spanning several months, went into it.. But I'm glad we concluded the deal and it will help us consolidate the market by a big margin, across all dimensions – users, creators, advertisers. I think the idea was largely to consolidate and concentrate the mind share of all stakeholders.

The most important value that we can extract from this deal would be to unify our back end systems, so that we can serve more relevant content to the user. Our content pool would now probably be one and a half times after .

At this point, apart from the Western social networks, there's no player as big as Sharechat and Moj. Going forward, we are going to stay true to our earlier focus areas, which are recommendation and rankings. The real game here is building a top-notch artificial intelligence  system for ranking and relevance on content.

A lot of Indian short video apps, including Moj, emerged after the ban on Chinese apps in 2020. Are you saying that you don’t consider them as competition any more?

When we started after the TikTok ban, there were around 50 short video apps. Most of them have either shut down or pivoted. And right now, we are far ahead because of the big investments made in AI capabilities and the acquisition – after which we would have roughly 260-300 million monthly active users (MAUs) for short videos and Sharechat brings another 180 million MAUs.

So, together as an ecosystem, we are at par with Facebook, or nearly as big as it, in India. If we need to pick our competitors today, it would be the Western apps like Facebook, YouTube or Pinterest. We are jostling with them for the users’ and creators’ mind share and times spent by them on our platforms.

Where are you on monetisation of ShareChat and Moj?

We have three monetisation strategies. First is ads which we have been doing for the last two years and is well understood – we help them in terms of reach, perception, installs, transactions. The second is virtual gifting which we have been doing for the past one year and are quite surprised by how well it is doing on ShareChat.  The way it works is – on a live stream, creators can get their fans to gift something like a Rs 10 virtual chocolate, of which the platform will take some cut and the creator will take some cut.

The third will be video commerce where we will enable our influencers to sell stuff online. In fact,  even if they are dancing in really good clothes, there will be an intent generated on the app and the user can quickly go and buy that on Flipkart.

What kind of gross merchandise values (GMVs) are you seeing on the e-commerce side?

By the end of 2023, we are targeting to get to a billion dollars of annualised GMV on the commerce side – meaning, video commerce and live commerce.

Is profitability on the horizon for you?

We do have an eye on things like profitability and revenue. Our two products – ShareChat and Moj – are in different phases at present. We expect ShareChat to break even in a few years, but it would be a longer journey for Moj.

While ShareChat is more mature and accounts for most of our revenues today via ads, we can enable the same advertising model on Moj as well. But we have chosen not to do it, because we are more focused on growth on the short video side.

After the expensive acquisition, is another funding round on the horizon?

We were lucky enough to raise a good amount of capital last year. We are well capitalised. But we are seeing a lot of interest from investors, more so after the acquisition. We are exploring right now and share any concrete details.

We'll let the market figure out the valuation. There is no burning need for the company to go out and raise capital – and so we will optimise for the right time, market, partners and accordingly evaluate the valuation.