ShareChat raises extra $16 million in debt financing amidst layoffs
ShareChat has raised an additional $16 million in debt financing through convertible debentures, increasing the total size of its previous debt round to $65 million, the company said on Saturday.
This funding comes as the company has laid off approximately 5% of its workforce, or around 40 employees. The reductions are part of a performance improvement plan (PIP) aimed at streamlining costs and achieving profitability.
The new funding was provided by EDBI, a Singapore-based fund, which is also an investor in the home design and renovation platform Livspace.
Email queries sent to ShareChat regarding the layoffs had not received a response by press time on Saturday.
In April, ShareChat raised $49 million in convertible debentures from existing investors, including Lightspeed, Temasek, Alkeon Capital, Moore Strategic Ventures, and HarbourVest. This funding round significantly reduced the company's valuation by over 60%, bringing it below $2 billion from its peak valuation of $5 billion in 2022, as reported by ET on April 16.
Convertible debentures allow companies to raise funds while setting a future price range for subsequent investments.
Over the past year, Mohalla Tech, the parent company of ShareChat and short video platform Moj, has been trying to reduce operating costs consistently through last year amid tightening funding squeeze and stiff competition from global rivals like Instagram and YouTube.
The company now has around 800 employees, down from a peak of 2,700.
According to the company, the
