Highlights
ShareChat, which is under Mohalla Tech, has introduced new employee stock option (ESOP) offerings as part of its ongoing ESOP programme for its workforce. The company’s board has given the green light to a special resolution that incorporates an additional 5,83,800 employee stock options to its current plan, thereby increasing the overall ESOP pool to 14,30,100 options, as indicated in its regulatory filing with the Registrar of Companies (RoC).
These stock options are designed such that each 100 options can later be converted into one (1) equity share, as stipulated in the agreement. The enhancement of the ESOP pool is intended to strengthen employee ownership while helping in the attraction, retention, and motivation of talent within the organization, as highlighted in the filing.
Valuation of New and Total ESOP Pool
Current estimates by Startup Superb value the newly added ESOPs at approximately Rs 2,283 crore or $271 million, while the entire ESOP pool is valued at Rs 5,592 crore or $665 million. Notably, the valuation of the newer ESOPs stands at $108 million, with the total ESOP pool reaching $265 million based on the company’s overall valuation of $2 billion.
Funding and Financial Challenges
Sources from the startup data intelligence platform highlight that ShareChat has successfully raised around $1.2 billion from various investors, including notable entities such as Twitter (now X), Alkeon Capital, Moore Strategic Ventures, and Tencent.
Despite this significant capital influx of over $1 billion, the company struggled to demonstrate substantial revenue as of FY23. Challenges in monetization contributed to a considerable decrease in valuation, which recently fell below $2 billion during a bridge funding round. In comparison, ShareChat was valued at $5 billion during its prior fundraising in June 2022.
Nonetheless, ShareChat reported a notable 30% year-on-year revenue growth to Rs 718 crore in the fiscal year FY24. By implementing effective cost-reduction measures, the adjusted EBITDA loss for the Tencent-supported company was recorded at Rs 793 crore during the same time frame.