Mohalla Tech, the parent company of vernacular social media platform ShareChat and short video entertainment app Moj, has secured approximately $49 million in debt funding from existing investors.
As per regulatory filings with the RoC, the company has approved issuing 4,895 Series I debentures at a price of $10,000 each, totaling $49 million.
Investors participating in this debt round include Temasek, Lightspeed, HarbourVest, Moore Strategic, Rimco, and Alkeon.
Additionally, ShareChat has unveiled bonus ESOP grants, doubling the ESOP holdings of all current employees, as a gesture to retain and reward its workforce.
This funding arrives amidst ShareChat’s pursuit of a $50 million raise, aiming for a valuation of $1.5 billion, following its previous valuation of $5 billion in June 2022.
According to TheKredible, a startup data intelligence platform, ShareChat has amassed approximately $1.8 billion in funding from investors such as Twitter (now X), Alkeon Capital, Moore Strategic Ventures, and Tencent.
ShareChat’s struggle to attract new investors and monetize its user base has led to cost-cutting measures, including two rounds of layoffs affecting 700 employees in 2023.
Despite operating for nine years, ShareChat faced significant losses, spending nearly Rs 4,000 crore in FY23 to generate revenue of Rs 533 crore, resulting in a high expense-to-revenue ratio.
The surge in losses can be attributed to the acquisition of Moj’s competitor, MxTakaTak, which incurred heavy expenses totaling $700 million in cash and stock.
While ShareChat faces minimal competition following the ban on China-origin apps like Helo, its short video app Moj competes with platforms like Dailyhunt’s Josh, YouTube Shorts, and Instagram.
Update: The headline and story have been revised to incorporate additional details from ShareChat’s press release.
