ShareChat aims to be cash flow positive in one year

Homegrown social media platform ShareChat said it aims to become a cash flow positive company in about a year even as the organisation formally announced the closure of raising $49 million in debt from its existing investors.

Parent company Mohalla Tech has two streams of business—ShareChat app and short video platform Moj.

In an interaction with YourStory, ShareChat founder and CEO Ankush Sachdeva said the company has over the last two years changed its mindset from a growth at any cost framework to building a sustainable business model.

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According to Sachdeva, ShareChat has seen its burn decline by 90% and revenue doubling over the last two years. The app business is already an operationally profitable entity.

The ShareChat app and Moj combined together has over 325 million users offering content in over 15 Indian languages. Sachdeva said it has been getting user traffic largely through organic routes and has stopped the inorganic acquisition methods.

The CEO said ShareChat is now in a steadier state and is looking at how it can increase its average revenue per user (ARPU).

The company primarily gets its revenue from two channels—advertising and micropayments. The advertising market has slowed down a bit in the current environment while the micropayments segment, which is largely a live streaming platform, continues to gain traction.

As for funding, ShareChat raised $49 million through the convertible debentures route from existing investors like Lightspeed, Temasek, Alkeon Capital, Moore Strategic Ventures, HarbourVest and others.

The company aims to utilise this capital to invest further behind its Ad targeting technology as well as continuing the growth of consumer transactions business on ShareChat Live and Moj Live.

Sachdeva said this funding round will provide more cushion and comfort for the next 4-5 quarters.

According to him, the largest cost for the company is on the compute technology in the delivery of cost and it is constantly looking at how it can bring this down further.

ShareChat also announced an organisation-wide ESOP bonus programme that will double this stock ownership for all its current employees.