ShareChat’s valuation falls beneath $2 billion in new funding

Social media startup ShareChat’s valuation has fallen beneath $2 billion from almost $5 billion in a brand new funding spherical, a supply acquainted with the state of affairs informed TechCrunch, marking a pointy drop for the nine-year-old Indian startup that boasts greater than 400 million customers within the South Asian market.

The Bengaluru-based startup, which runs a well-liked social community that helps a dozen Indian languages ​​in addition to a short-video app, introduced on Monday that it has raised $49 million in a convertible spherical. The corporate didn’t disclose the valuation at which the funds have been raised, however categorically denied that its new valuation was beneath $2 billion, saying there was “no valuation assigned to the spherical.”

Present buyers together with Lightspeed, Temasek, Alkeon Capital, Moore Strategic Ventures and HarbourVest have invested within the new spherical, the startup stated. Their debt will likely be transformed into fairness at a worth beneath $2 billion within the subsequent spherical, in accordance with a supply with direct data of the phrases. The supply requested anonymity so as to communicate candidly. TechCrunch reported in December that ShareChat was confronted with a pointy decline in worth.

ShareChat’s sponsors additionally embrace Google, X, Snap, Tiger World and Tencent. The corporate has raised about $1.75 billion thus far. ShareChat was valued at $4.9 billion in a funding spherical raised in mid-2022.

The decline got here regardless of ShareChat having had a surprisingly optimistic yr, aggressively chopping prices whereas managing to double its income. “When the market rotated, we needed to maintain again [acquisitions and creator payments] and transfer in the direction of extra worthwhile progress,” Ankush Sachdeva, co-founder and CEO of ShareChat, informed TechCrunch.

ShareChat did not spend any cash on person acquisition final yr, with Sachdeva noting that enhancements to the startup’s content material advice system are serving to with person retention and engagement. The corporate has additionally invested closely in synthetic intelligence expertise, notably in senior roles inside its London group. ShareChat additionally stated it has doubled the ESOP grant for each worker on the agency by way of a particular bonus grant.

In accordance with him, the corporate additionally managed to cut back its largest expense – the price of content material upkeep. “Whenever you get content material in one in every of our apps, we do numerous calculations to search out the highest 10 content material. To serve and devour it requires one other transport price. Optimization has helped us cut back prices,” he stated.

Over the previous two years, ShareChat has lowered its month-to-month money burn by 90% whereas doubling its income by attracting massive FMCG and gaming corporations as advertisers.

The startup additionally stays dedicated to the brief video market in India regardless of sturdy competitors from YouTube and Instagram following TikTok’s ban within the nation in 2020.

“When it comes to visitors, we’re decrease than Instagram and YouTube, however when it comes to standalone app, we’re the most important,” Sachdeva stated. He believes ShareChat’s distinctive deal with reside streaming as a spot for leisure and connections between creators and customers will differentiate it from its US rivals. Startup acquired native competitor MX TakaTak in a deal value greater than $700 million in 2022.

Supply hyperlink

Leave a Comment