Social media platform ShareChat was in the news this month for laying off 200 employees or 15 pc of its workforce.
In January this year, it had laid off 20 pc of its employees, an estimated 500 to 600 people. The company cited ‘several external macro factors that impact the cost and availability of capital’ for the move
As per a report in January by Deccan Herald, the platform cut 20 pc of its global workforce and 99 pc of layoffs were in India.
It also came to light in January 2023 that two (of three) co-founders, Bhanu Pratap Singh and Farid Ahsan, were stepping down from their active roles at the company. They started working on a robotics company of their own.
In a statement issued now, ShareChat said, “In alignment with our strategic vision, the company undertook a comprehensive restructuring effort to streamline operations, enhance productivity, and position the company for sustainable growth. The decision reflects the company’s commitment to streamlining its cost base and achieving profitability within the next 4 to 6 quarters.”
In August 2022, Hindustan Times reported a funding round of $100 mn led by Twitter (now X) in ShareChat,valuing the company at $ 600 mn.
The year started with the company raising $225 million from Google, Temasek and the Times Group. At the time, Business Standard reported that the company’s valuation had crossed $ 5 bn.
According to The Economic Times, ShareChat’s parent Mohalla Tech clocked Rs.540 cr in revenue in FY23, a 62 pc increase over the previous year. But losses widened 38 pc to Rs.4,064 cr.
The business daily reported that the company witnessed a drop in valuation from $4.9 bn last year to $1.5 bn. Multiple media reports cite the valuation trim as a move to raise $ 50 to 60 mn in a new round of funding, quoting unnamed sources.
According to a report in LiveMint.com in October 2023, the fresh investment was expected to value the company at $ 2.2 mn.
The layoffs at Sharechat and Moj and valuation correction must be viewed in the larger context. Several startups have had their valuations and headcounts slashed.
The Economic Times reported that Indian startups laid off over 28,000 people in 2023, quoting data exclusively shared with the publication by Longhouse Consulting.
Several of them have decided to bite the bullet and streamline operations and Sharechat has been streamlining operations for over a year now. In December 2022, the parent company of ShareChat, Mohalla Tech, had announced the shutting down of its fantasy gaming platform Jeet11.
According to Jayant (Shilanjan) Mundhra of Biz News+, ShareChat realised a bit late that it is hard to build a viral gaming business which then eventually led them to shut down Jeet11.
Gaurav Jain, Head of Emerging Business at ShareChat and Moj, was elevated to a newly created role of CBO in November 2023.
He told The Economic Times then that the company is “well on its way to profitability” in 2025.
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