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ShareChat parent reports maiden revenues from ads; Raises $60 mn loan from Twitter Ventures

ShareChat parent reports maiden revenues from ads; Raises $60 mn loan from Twitter Ventures
Photo Credit: 123RF.com
9 Feb, 2021

Bengaluru-headquartered Mohalla Tech Private Limited which owns and operates Indian language social media platform ShareChat and short video platform Moj, clocked maiden revenues from operations at Rs 9.38 crore for the financial year 2019-2020 (FY20). 

Of this, Rs 8.92 crore came from the sale of advertisements on the platforms while Rs 45 lakh was contributed by ecommerce related services, according to regulatory filings. 

The company had acquired social commerce platform Elanic in February 2020 to add ecommerce to its monetisation model.

The filings represent consolidated financials for Mohalla Tech and its 100% subsidiary, Mohalla Tech Games.

In a separate filing dated December 23, 2020, the company has also disclosed that it had received a term loan of $60 million from existing investor Twitter Ventures, the venture capital arm of the social media platform. The term loan was issued with the board’s approval stating that it can be converted to preference shares at a later date. 

The company’s total income in FY20 grew to Rs 38.12 crore as compared to Rs 25.63 crore in the previous year. 

The company widened its losses by 21.7% year-on-year to Rs 676 crore due to ballooning finance expenses and employee benefit expenses which grew by almost 174% year-on-year to Rs 80.25 crore. 

In its earnings filings, Mohalla Tech also mentioned that it was “incurring significant marketing expenses to acquire market share and engage more users on its platform.” Without specifying the split, the audited report said, “The group's marketing and other expenses for the year ended 31 March 2020 are in line with the internal budgets for the year,” adding that the company was on the lookout for additional funding. 

Mohalla Tech raised $40 million from returning investors Twitter, Lightspeed Venture partners, SAIF Partners and India Quotient to grow its short video app, Moj in September 2020. The round also saw participation from the family trust of the CEO and chairman of Hero MotoCorp, Pawan Munjal. 

Mohalla Tech founded by Farid Ahsan, Ankush Sachdeva and Bhanu Pratap Singh in 2015 has been focused on growing Moj as a platform after the ban on ByteDance backed popular short video app, TikTok in India in June last year. 

In the short video space, Mohalla Tech has stiff competition from VerSe Innovation, the parent company of short video app Josh and DailyHunt, which is now valued at over $1 billion after raising $200 million in December last year. InMobi subsidiary Glance which has a competing lock-screen short video product also raised $145 million from Mithril Capital and Google in December 2020, turning a unicorn.