Sharechat bags $49 million in debt round led by Lightspeed, Tencent
Summary
Social media unicorn ShareChat has raised $48.89 million in a debt round led by Tencent and existing backer Lightspeed amid a funding winter for tech startups.Regulatory filings sourced from startup data platform Kredible showed that HarbourVest, Moore Strategic Ventures, Rimco and Alkeon also participated in the debt funding.Inc42 was the first to report the development.Sharechat was valued at almost $5 billion in its last funding round. Its global peers in the social media space such as X (formerly Twitter) and Snap have seen large drops in valuation between the peak of the pandemic era and now.In December 2023, the company fired 200 employees, around 15 percent of its workforce, in the second such move this year, to cut costs and achieve profitability within the next four to six quarters.The move came after the company laid off around 600 employees in a similar cost-cutting move earlier this year, as co-founders Bhanu Pratap Singh and Farid Ahsan stepped down.The duo recently raised $3 million in seed funding from venture capital firms India Quotient, Elevation Capital and a few high-profile angel investors for their robotics startup General Autonomy.Backed by investors such as X (formerly Twitter), Google, Lightspeed and Temasek, ShareChats revenue increased by 59 percent to Rs 553 crore in FY23 from the previous year, the companys annual financial report, sourced from Tofler, shows.But the social media firms net losses shot up 72 percent to Rs 5,144 crore in FY23 on rising server rents, financing costs, foreign exchange losses, etc.According to a company source, the headline loss number for FY23 is inflated because of multiple notional cost entries and one-time expenses such as amortisation of goodwill from acquisitions (amounting to Rs 1,903 crore), forex losses on account of restatement of USD-denominated debentures and accrual of interest on debentures.