ShareChat's adjusted EBITDA loss shrinks 67% in FY24, revenue grows 33%

ShareChat claims to have over 325 million monthly active users across its platforms.

Homegrown social media unicorn ShareChat (Mohalla Tech) announced on November 26 that it has significantly reduced its losses for the financial year 2024, driven by a series of cost optimisation measures and increased revenue.

The firm's adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) losses fell by 67 percent to Rs 793 crore in FY24 from Rs 2,400 crore in FY23. The total loss before tax was at Rs 1,898 crore for the year, down 63 percent from Rs 5,143 crore loss in FY23.

The startup, which counts Google, Lightspeed, and Temasek among its investors, said that its social media platform ShareChat was fully profitable with over 15 percent EBITDA margin as of October 2024. Short video app Moj has achieved operational profitability, covering all costs except employee salaries, and is expected to be fully profitable by the end of FY25, it said in a statement.

The company's revenue grew 33 percent year-on-year (YoY) to Rs 718 crore for the year, from Rs 540 crore in FY23.

“Over the past few years, we have been successful in cutting our costs significantly and ramping up our revenue. This, coupled with our strategic investment in product development and recommendation engine, have charted our path to profitability," said Ankush Sachdeva, co-founder of ShareChat and Moj, in a statement.

ShareChat said it aims to further reduce its EBITDA losses in FY25 to nearly a third of FY24 figures, with the consolidated business expected to start generating positive cash flow by early FY26.

Over the past year and a half, ShareChat has reduced its workforce by around 850 employees across multiple rounds of layoffs. Moneycontrol had also reported that two of the company's co-founders - Bhanu Pratap Singh and Farid Ahsan - had quit amid a broader hollowing out of its senior management cadre in early 2023. The firm is now led by co-founder and chief executive Ankush Sachdeva.

ShareChat had also shut down its fantasy gaming vertical, Jeet11, and discontinued MX Takatak, the short video platform it acquired from Times Internet for $600 million in February 2022.

ShareChat stated it has been able to lower its server infrastructure costs. Since the beginning of 2024, the company has cut its server cost per user by 50 percent. The social media firm also mentioned that it has been able to cut user acquisition spends to near zero due to its efforts to improve feed ranking. The measure has resulted in a nearly 10 percentage point increase in long-term retention of both ShareChat and Moj users, it said.

ShareChat claims to have over 325 million monthly active users across its platforms. This includes 180 million monthly active users on its eponymous social media platform and nearly 160 million monthly active users on Moj.

Where are they making money?

The firm's livestreaming business saw its revenues surge 41 percent on-year to Rs 402 crore, driven by continued growth momentum in paying users across ShareChat and Moj platforms.

People purchase digital coins to buy virtual items for customising their profiles or sending virtual gifts to their favourite creators or live chat room hosts. ShareChat takes a cut when creators transfer the earnings to their bank account. Advertising revenues grew 23 percent on-year to Rs 315 crore as the company diversified its advertiser base across different verticals, particularly in the FMCG sector and among mid-market advertisers.

Started in 2015 by Sachdeva, Singh, and Ahsan, Bengaluru-based ShareChat has raised around $1.3 billion across multiple funding rounds. Its investors include India Quotient, Tiger Global, Snap Inc, Twitter (now X), Elevation Capital, Moore Strategic Ventures, EDBI, and Mirae-Naver Asia Growth Fund.