ShareChat now has a $5 billion valuation courtesy of a $300 million funding exercise that featured Google and other giants.
ShareChat parent company Mohalla Tech recently raised $300 million in a fresh funding round from a trio of major corporations, including Alphabet Inc’s Google (NASDAQ: GOOGL). ShareChat’s other backers are Indian media powerhouse The Times Group, and Singapore state holding company Temasek Holdings Limited.
The exercise values ShareChat at approximately $5 billion with a likely deal set for announcement next week. This report is according to two inside sources with first-hand working knowledge of the ShareChat development. However, Mohalla Tech failed to provide any additional insight to the funding. There are also no official details from Google, Temasek, and Times Group as of press time.
Google ShareChat Investment Highlights Growing Interest of American Tech Company in Flailing Indian Digital Industry
Google’s investment in ShareChat, headquartered in Bangalore, represents the American tech giant’s second key investment in India’s short video space. The California-based tech company previously invested in Josh, another app in direct competition with ShareChat’s sister firm Moj. In addition, one of the inside sources to the ShareChat deal also offers added perspective on Google’s investment in a bearish market for start-ups. According to this source, this move reflects a sizable appetite for the short video sector and the start-up’s investment thesis.
After generating a record $35 billion in fresh funds last year, Indian digital firms struggled to raise funds. This situation is further intensified by the presence of corporate governance bearing down on investors who face a new uncertainty in global markets. Speaking on the change of fortune for Indian tech platforms, India Quotient’s Anand Lunia said:
“We haven’t seen a slowdown like this in at least five to six years. It is going to be brutal. I expect to see a lot of zombie unicorns. Companies which became unicorns but have no business models have stopped hiring – they are not dying, but will become irrelevant.”
Short video apps such as Moj and Josh came to prominence after India banned ByteDance’s TikTok and some other Chinese apps in 2020. The ban came as a result of a border clash between both countries.
Also last year, Meesho – India’s Amazon – saw its valuation double to $5 billion after receiving capital from investors such as SoftBank and Fidelity. Since the funding, Meesho has been trying to raise debt and reduce expenses after failing to raise an additional $1 billion. This situation has made the e-commerce giant’s investors wary of its $45 million monthly cash burn.
ShareChat
ShareChat currently has a monthly active user base of more than 180 million. Meanwhile, Moj and Mohalla’s recently acquired MX TakaTak has 300 million monthly active users.
At its last funding round, ShareChat netted a valuation of $3.7 billion from a $266 million capital fund injection. Investors from that round included Alkeon Capital and Temasek, and ShareChat also has Twitter (NYSE: TWTR) and Snap (NYSE: SNAP) in its investor pool.
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