ShareChat raises $16 million while axing 5% of its workforce
ShareChat, a social media platform backed by Google and Temasek, has secured $16 million in funding while simultaneously reducing its workforce by approximately 5%. The reduction equates to around 30-40 employees and follows a bi-annual performance review. The recent fundraising is an extension of ShareChat's convertible debt round that had previously raised $49 million from Tencent and other existing investors like Lightspeed. The additional $16 million for ShareChat has been committed by a Singaporean fund.
Leadership and market challenges
Over the past 18 months, ShareChat has reduced its workforce by approximately 850 people in successive cost-cutting measures. In early 2023, two co-founders departed from the company amid a significant reshuffling of its senior management team. The most recent departure from ShareChat is Gaurav Bhatia, a senior vice president of engineering who joined in 2021.
ShareChat's journey amid tech start-up funding crunch
The recent developments at ShareChat occur against a backdrop of tightening funding for tech start-ups and the closure of Koo, another social media start-up. Currently, ShareChat is led by co-founder and CEO Ankush Sachdeva. Indian social media and short video apps like Koo, Chingari, Mitron among others have faced difficulties in scaling up and monetizing their platforms, particularly following the ban on Chinese apps due to border tensions.
ShareChat's financial performance and future prospects
Despite these challenges, ShareChat has demonstrated operational profitability. Its short video app Moj is also moving toward profitability. Valued at $5 billion in its last equity funding round, ShareChat saw a 59% increase in revenue from ₹347 crore in FY22 to ₹553 crore in FY23. However, net losses also rose by 72% due to increased server rents, financing costs, and foreign exchange losses.
