ShareChat is in closing levels of deliberations to safe about $50 million in new funding that trims the startup’s valuation to beneath $1.5 billion, in line with two sources conversant in the matter.
Current backers together with Temasek and Tencent are among the many buyers in superior levels of talks to put money into the brand new spherical, the sources stated, requesting anonymity because the matter is non-public. ShareChat has had discussions with a number of potential new buyers this yr, however many have balked on the alternative attributable to ShareChat’s excessive valuation expectations relative to their at present low income, in line with one of many potential buyers with whom the startup engaged.
The phrases of the talks, that are nonetheless ongoing so they could barely change, at present worth ShareChat beneath $1.5 billion, the sources stated, a steep drop from the $4.9 billion valuation at which ShareChat raised funding early final yr.
A spherical might finalize as early as finish of the yr. ShareChat didn’t instantly reply to a request for remark Wednesday morning. Temasek declined to remark, citing its coverage.
The loss-making Bengaluru-headquartered startup — which operates a social network and counts X, Snap and Tiger World amongst its backers — has raised greater than $1.4 billion thus far, in line with enterprise intelligence platform Tracxn.
ShareChat’s failed wager on the Indian short-video area amid the TikTok ban has pressured a hunt for funds and prompted the markdown. (In late 2020 and early 2021, X explored shopping for ShareChat in a $2 billion deal, TechCrunch exclusively reported earlier.)
Every day energetic customers on Google’s Android platform in India, per Sensor Tower’s estimates (shared to TC by an trade exec). In public statements, ShareChat claims it has over 300 million month-to-month energetic customers.
ShareChat, which launched the short-video app Moj in mid-2020, doubled down on the class by acquiring MX TakaTak, a video app in Occasions Web’s portfolio, for over $600 million; nonetheless trade analysts say YouTube and Instagram crammed the TikTok void as creators migrated to these far bigger platforms.
Eight-year-old ShareChat, whose two co-founders left earlier this yr to launch a brand new startup, has been scrambling to search out methods to develop its income and trim bills. It has tried a collection of initiatives, together with a fantasy sports app and a dwell audio chat service. However on the finish of economic yr ending March, its income remained beneath $65 million. It plans to cut back its workforce by one other 15% to twenty% within the coming weeks, in line with one other individual conversant in the matter.
Quite a few buyers are writing down the price of their holdings in startups globally amid the protracted slowdown in economic system that has additionally minimize quick the valuations of almost each public tech agency. Prosus not too long ago marked down the valuation of Byju’s to below $3 billion, down from $22 billion in early 2022. Byju’s has raised greater than $5 billion in fairness and through debt through the years.
