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ShareChat faces large valuation cut in new funding

ShareChat is in final stages of deliberations to secure about $50 million in new funding that trims the startup’s valuation to below $1.5 billion, according to two sources familiar with the matter.

Existing backers including Temasek and Tencent are among the investors in advanced stages of talks to invest in the new round, the sources said, requesting anonymity as the matter is private.

The terms of the talks, which are still ongoing so they may slightly change, currently value ShareChat below $1.5 billion, the sources said, a steep drop from the $4.9 billion valuation at which ShareChat raised funding early last year.

ShareChat didn’t immediately respond to a request for comment. Temasek declined to comment. A round could finalize as early as end of the year.

The loss-making Bengaluru-headquartered startup, which operates a social network and had a revenue of about $64 million in the financial year ending March, has raised more than $1.4 billion to date, according to venture intelligence platform Tracxn.

ShareChat’s failed wager on the Indian short-video space amid the TikTok ban has forced a hunt for funds and prompted the markdown.

Daily active users on Google’s Android platform in India, per Sensor Tower’s estimates. In public statements, ShareChat claims it has over 300 million monthly active users.

ShareChat, which launched the short-video app Moj, doubled down on the category by acquiring MX TakaTak, a video app in Times Internet’s portfolio, for over $600 million; however industry analysts say YouTube and Instagram filled the TikTok void as creators migrated to those far larger platforms.

source: TechCrunch