ShareChat has secured $49 million in a new funding round

If you are reading this from our website, you should join others who have subscribed to get quality tech updates in your box.

Social media startup ShareChat has secured $49 million in a new funding round but faces a significant valuation decline. The Bengaluru-based company, boasting over 400 million users in South Asia, is now valued below $2 billion, a sharp drop from its $4.9 billion peak in mid-2022.

Despite not disclosing the valuation in this convertible debt round, ShareChat maintains there was "no valuation" attached. However, existing investors will see their debt converted to equity at a lower valuation in the next round, confirming the decline.

This funding news comes amidst a positive year for ShareChat. The company has managed to double its revenue while aggressively cutting expenses. This shift towards profitability involved tempering acquisitions and creator payments. Additionally, ShareChat hasn't spent on user acquisition in the past year, crediting improved content recommendations for driving user retention and engagement. Cost reduction efforts also included optimizing content delivery and reducing the company's single-largest expense.

ShareChat highlights its commitment to the short-video market in India despite competition from YouTube and Instagram. The company believes its focus on live-streaming as a destination for entertainment and creator-user connections will differentiate it from American rivals. Notably, ShareChat acquired local rival MX TakaTak in 2022 for over $700 million.

Overall, ShareChat's funding round reflects a complex situation. While the company demonstrates impressive user growth and financial responsibility, the valuation decline aligns with broader market trends in the tech sector.

If you are reading this from our website, you should join others who have subscribed to get quality tech updates in your box.