ShareChat’s parent company, Mohalla Tech, claims to have clocked an impressive 33% year-on-year growth in FY24, but the financial story is not entirely transparent. While the Bengaluru-based firm highlighted its adjusted EBITDA figures, the net losses remain undisclosed, leaving questions hanging in the air.
Revenue Growth Driven by Streaming and Ads
The company’s revenue from operations surged by 29.9%, reaching ₹718.1 crore in FY24, up from ₹552.73 crore in FY23, according to its consolidated financial statements filed with the Registrar of Companies. This growth was primarily fueled by two key sources: live streaming and advertising.
- Live Streaming Dominates
Live streaming, or chatrooms, emerged as a strong revenue driver, contributing 56.1% of the total operating revenue. It grew by a robust 41.4% to ₹403 crore in FY24. - Advertising Revenue Climbs
Advertising brought in ₹315.37 crore, marking a 23.5% rise compared to FY23. This steady growth underscores the company’s ability to attract advertisers despite the competition in digital ad markets.
The combined performance of these two verticals underscores ShareChat’s dual strategy of engaging users while monetizing through ads and paid features.
Spending Trends: Investment or Overspend?
While revenues showed significant growth, the cost side of the balance sheet painted a challenging picture. Mohalla Tech’s total expenses surged to ₹2,567.3 crore in FY24, compared to ₹2,047.6 crore in FY23, an increase of nearly 25.4%.
- Employee Costs and Operational Spending
Employee-related expenses made up a large chunk of the spending, as the company reportedly continues to hire aggressively. Operational costs, including marketing and infrastructure, also contributed significantly to the rise.
A single-line adjusted EBITDA figure can’t mask the reality of high burn rates, especially when operating expenses outstrip revenues by over three times.
Challenges in the Monetization Game
Despite being one of India’s leading social media platforms with ShareChat and Moj, Mohalla Tech faces intense competition from global players like Instagram Reels, YouTube Shorts, and TikTok (internationally).
Here’s why monetization remains tricky:
- Ad Saturation: As advertisers diversify spending across multiple platforms, ShareChat must fight harder for ad dollars.
- User Base vs. ARPU: Although ShareChat claims a growing user base, the average revenue per user (ARPU) lags behind global competitors.
- Content Costs: Investments in creators and exclusive content continue to pressure margins.
What’s Next for Mohalla Tech?
The path ahead is both promising and challenging. ShareChat is doubling down on vernacular content and community-focused features, aiming to strengthen its niche in the Indian market. Moj, meanwhile, continues to bank on the short video craze, which is far from over.
- Funding Needs
With mounting expenses, fresh funding could be crucial. Investors, however, will likely demand clarity on net losses and a roadmap toward profitability. - Tech and AI Integration
Mohalla Tech is reportedly investing heavily in AI and data analytics to enhance user experience and improve ad targeting, a move that could pay off in the long run.
ShareChat’s financials offer a mixed bag of optimism and uncertainty. While revenue growth is commendable, the lack of disclosure around losses and a high expense-to-revenue ratio remain concerning. For now, Mohalla Tech seems to be playing the long game, betting on India’s digital potential and its growing vernacular audience base.
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