ShareChat parent's losses doubled to Rs 2,988 crore in FY22

Representative image.

Google-backed Mohalla Tech, the parent of social media platform ShareChat and short video app Moj, which was last valued at $4.9 billion, saw its losses balloon to Rs 2,988.63 crore in FY22 doubling from Rs 1,460 crore reported in the previous fiscal year, as per regulatory filings.

Even as the losses doubled, revenue from operations increased many folds to Rs 346.93 crore, up from Rs 80.41 crore in FY21, growing over 331 percent.

The majority of this revenue came from advertisements and chatrooms. Revenue from sales of advertising services grew by more than 175 percent YoY touching Rs 212.16 crore from Rs 76.97 crore, while revenue from chatroom increased to Rs 120.53 crore from Rs 3.44 crore in FY21.

“The Group is continuing to witness growth in revenue and the number of users on both the platforms 'ShareChat' & 'Moj' in the initial stages of revenue generation. The Group has enough liquidity to manage operations and accordingly the financial statements have been prepared on a going concern assumption. Consequently, no adjustment has been made to the carrying values or classification of the assets or liabilities,” the company said.

Total expenses for FY22 increased to Rs 3,407.56 crore from Rs 1,557.52 crore, up by over 118 percent.

Mohalla Tech had last raised $78 million earlier in 2022. The company then laid off about 115 employees in December having shut down the operations of its fantasy gaming platform Jeet11. The platform was launched in February 2020 to compete with peers such as Dream11 and Mobile Premier League (MPL).

The company’s key investors include Google’s parent Alphabet, Temasek Holdings, Twitter, Lightspeed Venture Partners, Elevation Capital, India Quotient and Morningside Venture Capital, to name a few.

Despite raising a lot of funds earlier, overall the social media apps and short video segment are seeing a slowdown, with not just Mohalla Tech but peers like Josh’s parent VerSe Innovation laying off employees. VerSe Innovations recently laid off about 150 employees and announced company-wide pay cuts for employees earning more than Rs 10 lakh per year.

Amidst a funding winter, the biggest pain point for the sector is to reduce losses and find sustainable revenue models. Meanwhile, last week, ShareChat’s Chief Commercial Officer Ajit Varghese had quit the company. He was responsible for expanding and strategising the platform’s revenue efforts.