Sharechat to ramp up investments in algorithms to improve user retention

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Subscribe to enjoy similar stories. Homegrown social media unicorn Mohalla Tech, which operates Sharechat and short video platform Moj, will increase investments in improving its algorithms to suggest more accurate and personalized content for users, aiming to improve user retention, a top executive said on Tuesday. The Temasek and Tiger Global-backed company has allocated most of its recent $65 million convertible debentures round towards algorithms for advertisement and content targeting, Manohar Singh Charan, chief financial officer at Mohalla Tech, told Mint.

“If you use a rudimentary algorithm to service content to a user, you will spend less money but will soon enough lose the user because they’re always looking for something more. Better and more personalized algorithms are crucial to retain users on the platform," Charan said. Sharechat saw a 25% increase in its user retention rate in FY24 compared to FY23, Charan said.

However, social media companies including short video platforms need to figure out a concrete monetization plan to be able to consistently service users, he said, without disclosing investment figures. In FY24, Sharechat saw its operating revenue grow by 23% to ₹718 crore from the previous financial year, helped by modest growth in its advertising and livestreaming revenue businesses. It managed to cut down expenses by more than half to ₹2,644 crore on the back of automation and server cost optimization alongside widening its user base, according to filings made with the Registrar of Companies (ROC).