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.
Eight-year-old ShareChat, whose two co-founders left earlier this year to launch a new startup, has been scrambling to find ways to grow its revenue and trim expenses. It has attempted a series of initiatives, including a fantasy sports app and a live audio chat service. But at the end of financial year ending March, its revenue remained below $65 million. It plans to reduce its workforce by another 15% to 20% in the coming weeks, according to another person familiar with the matter.
Numerous investors are writing down the worth of their holdings in startups globally amid the protracted slowdown in economy that has also cut short the valuations of nearly every public tech firm. Prosus recently marked down the valuation of Byju’s to below $3 billion, down from $22 billion in early 2022. Byju’s has raised more than $5 billion in equity and via debt over the years.
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