 "ShareChat raises $49 mn via convertible debentures from existing investors")
Indian social media company ShareChat has announced the closure of its $49 million funding round via convertible debentures.
But the company’s valuation has reportedly dipped by 60 per cent to $2 billion from its peak in 2022 when it was $5 billion.
Meanwhile, the current funding round was led by existing investors Lightspeed, Temasek, Alkeon Capital, Moore Strategic Ventures and HarbourVest, amongst others.
This capital raise will help the company invest further behind its Ad targeting technology as well as continuing the growth of consumer transactions business on ShareChat Live and Moj Live.
The ShareChat app is already operationally profitable, and the short video app Moj is expected to achieve operational profitability over the next few months.
“The new funds will be utilised to bolster our robust monetisation plans and propel us on our path to break-even and beyond,” said Ankush Sachdeva, CEO and Cofounder, ShareChat and Moj.
He said the investor support in a challenging financial environment is a vote of confidence for the path the firm has taken over the past years to move rapidly towards profitable growth.
As the company marches towards profitability, it announced an organization-wide ESOP (employee stock ownership plan) bonus program that will double the ESOP ownership for all of its current employees.
This move is aimed at retaining its top talent and rewarding them for taking the company to a financially healthier state.
Talking about the expanded ESOPs, Sachdeva said, “Our employees were the single most important force powering 2x revenue growth and 90 per cent reduction in our monthly losses over the past two years.
“We wanted to recognise their efforts and incentivise our teams to continue this momentum and push the company to profitability in the next 4-5 quarters and then to IPO. We are excited to announce a special bonus grant that will double the total ESOP grant for every employee. We are setting aside an ESOP pool equal to 3.5 per cent of the cap table to be disbursed as bonus grants.”
ShareChat (Mohalla Tech) runs India’s largest short video platform, Moj, besides the ShareChat app, which together cater to over 325 million users. The company has in the past year, focused on rapidly monetising its various platforms and seen its revenue surge. It has built diversified monetisation avenues beyond advertising in areas like virtual gifting.