ShareChat's valuation drops below $2 billion in new funding | TechCrunch

ShareChat's valuation drops below $2 billion in new funding | TechCrunch

Social media startup ShareChat has dropped its valuation from about $5 billion to less than $2 billion in a new funding round, a source familiar with the situation told TechCrunch, which is looking for the nine-year-old Indian startup. Marked a huge drop that has more than 400 million users. South Asian market.

The Bengaluru-based startup, which runs a popular social network that supports a dozen Indian languages ​​as well as a short-form video app, announced on Monday that it has raised $49 million in a convertible round. . It did not disclose the valuation at which the funds were raised but strongly denied that its new valuation was below $2 billion, saying there was “no valuation” attached to the round.

Existing investors including Lightspeed, Temasek, Alkeon Capital, Moore Strategic Ventures and HarbourVest have invested in the new round, the startup said. According to a source with direct knowledge of the terms, their debt will convert to equity in the next round at a value of less than $2 billion. The source requested anonymity to speak openly. TechCrunch reported in December that ShareChat was A steep assessment is faced.

ShareChat also counts Google, X, Snap, Tiger Global and Tencent among its backers. It has raised around $1.75 billion to date. ShareChat was valued at $4.9 billion in a funding round raised in mid-2022.

The markdown comes despite Chat having had a remarkably positive year, managing to double its revenue while aggressively cutting costs. ShareChat co-founder and chief executive Ankush Sachdeva told TechCrunch in an interview, “When the market turned, we had to temper (acquisitions and creator payments) and move towards more profitable growth.” “

ShareChat didn't spend money acquiring users last year, with Sachdeva crediting improvements in the startup's content recommendation engine for driving user retention and engagement. The company has also invested heavily in AI talent, particularly for senior roles in its London-based team. ShareChat also revealed that it has doubled the ESOP grant for every employee in the firm as part of a special bonus grant.

It has also been able to reduce its single biggest expense, which is the cost of serving content, he said. “When you bring content to one of our apps, we do a lot of calculations to find the 10 best pieces of content. To serve and consume it, there's another delivery cost. Optimizing it allows us to reduce our burn.” has helped reduce,” he said.

ShareChat has reduced its monthly cash burn by 90% in the last two years while doubling revenue, attracting major FMCG firms and gaming companies as advertisers.

The startup is also committed to the short video market in India despite stiff competition from YouTube and Instagram following the country's ban on TikTok in 2020.

“In terms of traffic, we are smaller than Instagram and YouTube, but we are the largest in terms of standalone app,” Sachdeva said. He believes that ShareChat's unique focus on live streaming will differentiate it from its U.S. competitors as a destination for entertainment and creative user connections. The beginning Acquired local rival MX TakaTak. 2022 in a deal worth more than $700 million.

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