ShareChat and Moj are floundering. Can the businesses be fixed?

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₹5,144 crore, as per the company’s latest filings sourced from Tofler. While the company grew its total income 71% to ₹718 crore during the year, the growth in advertising—a key revenue stream—appears to be slowing down. To understand the way forward for the company, and if it can survive, we spoke to former and current employees, investors, market watchers and ShareChat’s current bosses—Sachdeva and Manohar Charan, the chief financial officer (CFO).

First, let’s look at Mohalla’s revenue. The company has two monetization models—advertising and live streaming by influencers and celebrities. The pace of growth in advertising revenue is what concerns investors and market watchers.

Mohalla saw nearly a threefold rise in advertising revenue in 2021-22 to ₹212 crore. However, in the following year, the company grew revenue from this stream by a moderate 20% to ₹255 crore. Customer mix is partly responsible for the sluggish growth.

Real money gaming companies, who now have to pay hefty goods and services tax (GST), have cut back on marketing from the platform. Currently, gaming customers contribute to about 10-15% of the company’s monthly revenue, a ShareChat spokesperson said, adding that the number can drop below 10% in some months. When the Indian Premier League (IPL), the popular T20 cricket tournament, is on, the revenue share jumps.

But then, there is another problem. Some gaming advertisers said they don’t see enough return from the platform. “We’ve used the ShareChat platform several times for our clients and it did not translate into any substantial business as their engagement and performance was quite shallow," a top executive at a marketing company said, asking not to be named.