Parent entity of ShareChat and Moj raises $49 million in debt
The parent company of the short video entertainment app Moj and the vernacular social media network ShareChat, Mohalla Tech, has raised about $49 million in debt from current investors.
According to a regulatory filing with RoC, the company’s board has approved the issuance of 4,895 Series I debentures at an issue price of $10,000 apiece in order to raise $49 million.
Parent entity of ShareChat and Moj raises $49 million in debt
The debt round was funded in part by current investors Temasek, Lightspeed, HarbourVest, Moore Strategic, Rimco, and Alkeon.
ShareChat has also announced bonus ESOP grants that will double the ESOP holdings of all of its present employees in an effort to retain and reward its staff.
Parent entity of ShareChat and Moj raises $49 million in debt
The new funding comes at a time when ShareChat was hoping to raise $50 million in a down round to the tune of $1.5 billion. After its most recent fundraising effort in June 2022, the company was valued at $5 billion.
ShareChat has raised over $1.8 billion from investors, including Twitter (now X), Alkeon Capital, Moore Strategic Ventures, and Tencent, among others, according to startup data intelligence platform TheKredible.
Parent entity of ShareChat and Moj raises $49 million in debt
ShareChat has been considering a sizable financing round, but the business is having trouble enlisting both new and returning investors. Additionally, it implemented a number of cost-cutting initiatives and fired 700 workers in two stages in 2023. The company’s incapacity to generate revenue from its user base, which has little purchasing power, is a major factor in its struggles.
Parent entity of ShareChat and Moj raises $49 million in debt
Even after nine years of operation, ShareChat’s revenue in FY23 was only Rs 533 crore after spending about Rs 4,000 crore. In the previous fiscal year, it cost Rs 7.16 per unit to generate one rupee of operational revenue. For a unicorn in FY23, this is one among the highest expense-to-revenue ratios.
Parent entity of ShareChat and Moj raises $49 million in debt
The company’s write-off for the purchase of MxTakaTak, a rival of Moj, was the main cause of the spike in losses. The business invested a significant sum of money ($700 million in cash and shares) to purchase the Times Internet-backed business.
With the complete ban on China-origin applications, such as Bytedance’s Helo, ShareChat has virtually no competition; however, its short video app Moj faces competition from Dailyhunt’s Josh, YouTube Shorts, and Instagram.
