ShareChat has recently faced a valuation drop in the new funding round. The social media enterprise has taken the world by storm during its early days of launching. Based in Bengaluru, the company has a user base of more than 400 million only from South Asia. Nevertheless, the valuation has decreased from the giant $2 billion to a mere $5 billion. Various factors have played a critical part in bringing down the value of this social media startup.
The Funding Round
ShareChat has revealed the securing of $49 million in its recent funding round. However, no official details are available as the enterprise hasn’t revealed the exact valuation. While the transparency is not there, TechCrunch has confirmed that the current figures are far lower than the previous $5 billion mark. Numerous existing and new investors have participated in the funding round.
Enterprises including the likes of Lightspeed, HarbourVest, Alkeon Capital, Temasek, and Moore Strategic Ventures are among the all-time investors of this company. They also take part in the current funding round. Their deb investment is expected to be changed into equity at a valuation of $2 billion. Thus, it showcases that the company is going through several financial challenges and it requires significant funding to overcome them.
ShareChat Progress
Although ShareChat has been going through tough financial challenges, it still has pocketed several positive outcomes in the previous year. On one hand, the enterprise has reduced its expenses. On the other hand, it has made efforts to double its revenue. The updates in the content recommendation engine have played a solid role in enhanced user retention Consequently, the company has saved a lot of money from spending on the acquisition of new users.
Another key factor that played its part in the progress of this social site is that it has invested in AI talent. In its London-based team, the company has integrated the AI models in senior positions. Above all, ShareChat has increased the Employee Stock Ownership Plan to the double mark for each employee. Thus, the company is looking forward to retaining its workers and motivating them to work hard.
ShareChat has optimized its content delivery service which has reduced its monthly expenses by a total of 90%. This has played an incredible part in the progress of the company in the past two years.
Future Prospects
While YouTube and Instagram are currently on the top across the globe, ShareChat is also making its way to become their competitor after the banning of TikTok in India. Although it is still not getting the same level of traffic as these two social sites are, the owners are quite encouraged to make it the best platform in this niche.
