ShareChat Secures $49 Million Debt Round Led by Lightspeed and Tencent

• ByStartupStory     |    March 28, 2024

ShareChat, a leading social media platform, has successfully secured $48.89 million in a debt financing round, with Lightspeed and Tencent spearheading the investment. The funding round comes at a critical juncture for tech startups amidst what industry insiders are referring to as a “funding winter.”

According to regulatory filings obtained from startup data platform Kredible, other notable participants in the debt funding include HarbourVest, Moore Strategic Ventures, Rimco, and Alkeon. The recent injection of capital underscores investors’ continued confidence in ShareChat’s trajectory and potential despite prevailing market challenges.

The news of the funding round was initially reported by Inc42, highlighting ShareChat’s resilience and strategic maneuvering in the current economic landscape. The company, valued at nearly $5 billion in its previous funding round, has been navigating a series of strategic shifts and optimizations aimed at driving sustainable growth.

In a bid to streamline operations and enhance profitability, ShareChat implemented a workforce reduction strategy, resulting in the termination of approximately 200 employees, constituting around 15 percent of its workforce, in December 2023. This move followed an earlier round of layoffs, where approximately 600 employees were let go earlier in the year, coinciding with the departure of co-founders Bhanu Pratap Singh and Farid Ahsan.

However, amidst these adjustments, ShareChat continues to explore avenues for innovation and expansion. Singh and Ahsan recently secured $3 million in seed funding for their robotics startup, General Autonomy, from venture capital firms India Quotient, Elevation Capital, and several prominent angel investors.

ShareChat’s financial performance in the fiscal year 2023 reflects both progress and challenges. The company reported a 59 percent increase in revenue to Rs 553 crore from the previous year, according to its annual financial report sourced from Tofler. However, net losses surged by 72 percent to Rs 5,144 crore, attributed to various factors including rising server rents, financing costs, and foreign exchange losses.

A company source provided insights into the financial figures, indicating that the headline loss number for FY23 is influenced by several notional cost entries and one-time expenses. Notably, these include amortization of goodwill from acquisitions amounting to Rs 1,903 crore, forex losses due to restatement of USD-denominated debentures, and accrual of interest on debentures.

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