ShareChat FY22 Operating Revenue Jumps 4.3X YoY to INR 347 Cr, Loss Surges To INR 2,500 Cr

Mohalla Tech Private Limited, the parent company of indigenous social media platform  ShareChat, reported a 4.3X jump in its total revenue to INR 419.2 Cr during the financial year 2021-22 (FY22) from INR 80.4 Cr in FY21 on the back of a sharp jump in its operating revenue, as per regulatory filings. 

The Google-backed startup’s revenue from operations surged 4.3X to INR 346.9 Cr from INR 80 Cr in FY21. 

Mohalla Tech mostly generates revenue through advertisement on the ShareChat app, which increased 30% year-on-year (YoY) in FY22. Besides, the startup also generates revenue from live streaming on ShareChat and newly acquired short-video platform Moj. It earned INR 121 Cr through live streaming this year. ShareChat contributed the majority of revenue as the startup only recently started monetising Moj. 

It also racked up non-operating expenses of INR 490 Cr in FY22. These expenses included non-cash notional provisions such as liability component of convertible stocks, stock-based compensation, depreciation, and one-time extraordinary costs. 

Without the non-operating expenses, the company posted a loss of INR 2,498.6 Cr in FY22, a jump of almost 2.1X from INR 1,183.6 Cr. However, the loss widened further to INR 2,988.6 Cr including the non-operating expenses. In FY21, the startup loss including non-operating expenses was INR 1460.9 Cr. 

Led by the increase in marketing, employee benefits, and IT expenses, Mohalla Tech’s total expenses shot up 119% to INR 3,407.5 Cr from INR 1,557.5 Cr in FY21. Business development expenses constituted the largest portion of total expenses at INR 1,142.8 Cr in FY22, an increase of 72% from INR 662.6 Cr in FY21. 

Business development expenses include marketing expenses, branding and user acquisition costs. 

Employee benefit expenses also surged 2.7X to INR 505 Cr in FY22 from INR 183.2 Cr in the previous year. Employee benefit expenses comprise employee salaries, PF contributions, gratuity, and other employee welfare benefits. A strong increase in employee benefit expenses is an indication that the company has increased its employee headcount. 

Earlier this month, Inc42 reported that the startup increased its ESOP pool size to INR 2,375 Cr (about $292 Mn) by adding fresh options worth INR 900 Cr. 

It must be noted that amidst the funding winter, Mohalla Tech, like other startups, is also trying to cut its expenses. As part of this exercise, it pulled the plug on its fantasy gaming platform Jeet11 last month.

Founded in 2015 by Ankush Sachdeva, Bhanu Singh, and Farid Ahsan, Mohalla Tech positions ShareChat as an Indic language social media platform. Earlier this year, it acquired Times Internet owned social short-video platform MX TakaTak for over $600 Mn to foray into the competing short-video social space. ShareChat and Moj together have 400 Mn monthly active users currently.

The startup closed its $520 Mn funding round at a valuation of $5 Bn in June this year. It raised the funds in two tranches. While it raised $266 Mn from Alkeon Capital, Temasek, HarbourVest, Moore Strategic Ventures and India Quotient late last year, Google and Times Internet joined as new investors this year, infusing the remaining amount along with Temasek.

ShareChat competes against the likes of Facebook, Twitter, Reddit, and Koo in the social media space.