Highlights
Overview of Mohalla Tech’s Financial Performance
Mohalla Tech, the parent company of the vernacular social media platform ShareChat and the short video entertainment app Moj, has reported a remarkable year-on-year growth of 33% for FY24. Despite this achievement, the Bengaluru-based company did not reveal net losses, opting instead to present adjusted EBITDA.
Revenue Insights
According to the consolidated financial statements filed with the Registrar of Companies, ShareChat’s operational revenue surged by 29.9%, reaching Rs 718.1 crore for the fiscal year ending March 2024, a significant increase from Rs 552.73 crore recorded in FY23.
Mohalla Tech is dedicated to the development and management of mobile software applications known as ‘ShareChat’ and ‘Moj’. These platforms facilitate the creation, consumption, and sharing of diverse content, including quotes, videos, images, and news.
Revenue Breakdown:
- Live Streaming/Chatroom Revenue: This segment accounted for 56.1% of total operating revenue, increasing by 41.4% to Rs 403 crore in FY24.
- Advertising Revenue: Increased by 23.5%, totalling Rs 315.37 crore.
- Online Fantasy Sports: Generated Rs 12.52 crore last year through Jeet 11, which ceased operations in December 2022.
- Interest and Gains: An additional Rs 28.98 crore was earned from interest and financial assets, bringing total revenue to Rs 747.08 crore in FY24.
Expenditure Analysis
On the expenditure side, employee benefits emerged as the largest cost centre, representing 21.9% of total expenses. This cost decreased by 16.8% to Rs 580.39 crore in FY24, down from Rs 697.96 crore in FY23, which notably included an ESOP expense of Rs 131.95 crore.
In 2023, the company undertook several cost-cutting initiatives, including laying off 700 employees in two phases. Further reductions are anticipated for FY25 with an additional 5% of the workforce being let go in August 2024.
Key Expense Insights:
- The cost of server rentals decreased by 45.3% to Rs 559.57 crore in FY24.
- Finance costs rose by 50% to Rs 510.57 crore due to significant debt payments.
- Provisions for doubtful assets and loans increased by 102% to Rs 402.56 crore in FY24.
Overall, total expenses fell by 33.2%, amounting to Rs 2,644.71 crore in FY24 compared to Rs 3,958.75 crore in FY23.
Note: The cost of Rs 1,903 crore related to the amortisation of intangible assets (non-cash) is excluded from total expenses and losses for FY23, as this amount was related to optionally convertible debentures for MX TakaTak.
Losses and Financial Health
Due to significant reductions in expenses alongside honest growth, ShareChat’s losses decreased by 41.4%, amounting to Rs 1,898.94 crore in FY24, down from Rs 3,240.83 crore the previous year.
The adjusted EBITDA loss improved to Rs 777.84 crore in FY24 from Rs 2,342.11 crore in FY23, excluding finance costs, depreciation, amortisation, ESOP costs, provisions for doubtful assets, and foreign exchange losses.
As of FY24, total outstanding losses for ShareChat climbed to Rs 12,438 crore.
Cash Flow and Assets:
- Operating cash outflows enhanced by 68.3% to Rs 964.96 crore.
- EBITDA margin improved, settling at -183.50% for FY24, while it cost Rs 3.68 to generate one rupee of operating revenue.
- The company had cash and bank balances of Rs 36.2 crore, with total current assets valued at Rs 128.96 crore.
Debt and Funding Situation
Borrowings witnessed a minor increase, with non-current liabilities rising from Rs 4,810.17 crore in FY23 to Rs 5,401.44 crore in FY24, indicating the company’s reliance on external financing. Outstanding dues from creditors and small enterprises totalled Rs 357.78 crore during the financial year.
Given these losses, substantial debts, and limited cash on hand, the company will inevitably depend on funding to manage working capital.
Per insights from various startup data intelligence platforms, ShareChat has successfully raised approximately $1.8 billion from investors, including Twitter (now X), Alkeon Capital, Moore Strategic Ventures, and Tencent, among others. In 2024 alone, it secured $65 million in debt across two tranches.
