ShareChat to raise up to $50 mn in a bridge round

livemint.com:

MUMBAI : ShareChat, the short-video platform backed by Google Llc, is seeking fresh investments that would value the social-media company at $2.2 billion, marking a 55% drop from the valuation it secured last year, two people aware of the development said. “The company is looking at a bridge round of around $40-50 million in primary capital," said one of the people mentioned above. However, a third person close to the founder said it would be a growth equity round as the company is getting closer to breaking even.

“The company has brought down the monthly burn from $45 million in 2022 to around $5 million now. The marketing costs are down by 98%. The revenues are now close to meeting the burn." The company had announced mass lay-offs in January, affecting almost 20% of its workforce.

It also shut its gaming division last year and scaled down its social-commerce, live-commerce and fact-checking vertical to contain the burn. The company’s annualized revenue run rate is around $120 million. A ShareChat spokesperson declined to comment.

The company has also seen a setback in the growth projections it had for its short-video format Moj, which competes with Josh, YouTube and Instagram in the category. “The growth has not played out the way the company envisaged. Also, the burn continues to be high given the sluggish growth," the first person said.

The company has raised more than $1.43 billion from investors across various funding rounds. ShareChat’s parent company, Mohalla Tech Pvt. Ltd, was last valued at $5 billion in 2022 when it raised $300 million in fresh funding from Google, The Times Group and Temasek Holdings (Pvt.) Ltd.