ShareChat parent’s losses balloon to ₹2,988 cr in FY22

Mohalla Tech, the parent company of homegrown social media platform ShareChat and short video entertainment app Moj, reported a more than two-fold rise in its consolidated net loss to ₹2,988 crore in FY 2021-22 as compared to losses worth ₹1,460 crore in FY21, the consolidated annual financial statement filed with the Registrar of Companies (RoC) shows.

The company's total income for the fiscal year stood at ₹419 crore, recording more than a four-time jump from ₹96 crore income in FY21. In terms of expenses, the homegrown social media company burned around ₹3,407 crore in FY22, over two times its expenses in FY21, which were at ₹1,557 crore.

Mohalla Tech, on a standalone basis, saw its income rise from ₹97 crore in FY21 to ₹405 crore to FY22, and its total expenses rose from ₹1,543 crore in FY21 to ₹3,347 crore in FY22. Its losses, on a standalone basis, ballooned from ₹1,446 crore in the previous year to ₹2,941 crore in FY22.

The Bengaluru-based company said in view of continuing losses during the financial year (FY22), the board didn’t recommend any dividend. The company runs five subsidiaries, including three direct subsidiaries and two indirect subsidiaries, which are Mohalla Tech Games Private Ltd, ShareChat Labs Inc., Mohalla Asia Private Ltd, Mohalla Internet Private Ltd, and ShareChat UK Private Ltd.

The company said its revenue increased with respect to advertisement and chatrooms, which resulted in a positive ratio. Its expenditure also increased with respect to business development, server rent, content related expenses, which depleted the ratio.

ShareChat parent also acquired Jeet11, a fantasy sports gaming platform, which allowed its registered users to play fantasy sports like cricket, football, kabaddi, etc, in February 2020. Interestingly, the company shut down the entity in December 2022 amid intense competition.

Notably, the ShareChart parent led the funding chart in India in the media and entertainment segment, with M&E and fintech segments together cornering about 45% of the total quarterly funding in Q2 CY22.

The rise of homegrown short-video apps after the ban of TikTok in India nudged investors to explore the space by infusing money into homegrown apps. A flood of affordable smartphones and cheap data tariffs have enabled millions to create content and market them on digital platforms, the haven of the young population, fuelling the growth of the segment.

The Moj and ShareChat parent also secured $255 million during Q2 FY22, closing a larger $520 million funding round. The company had raised $520 million via multi-tranche funding round at a $5-billion valuation in June.

In the first part of the funding round, ShareChat raised $266 million in December 2021 from Alkeon Capital, Temasek, HarbourVest, Moore Strategic Ventures, and India Quotient. In the final tranche, post the acquisition of MX TakaTak, ShareChat added Google and Times Group as new investors, while Temasek participated yet again, adding $255 million.