ShareChat, the popular Indian social media platform, faced a challenging year in FY23, marked by significant losses and executive changes. Despite a 59 percent increase in revenue from Rs 347 crore in FY22 to Rs 553 crore in FY23, the company experienced a notable surge in net losses, rising by 72 percent from Rs 2,989 crore to Rs 5,144 crore. These losses were primarily driven by soaring expenses such as server rents, financing costs, foreign exchange losses, and provisioning for doubtful assets.
One aspect worth highlighting is ShareChat’s transition in its biggest revenue drivers. Previously, Facebook and Google held this position, with Facebook contributing Rs 27 crore in FY22 and Google bringing in Rs 50 crore in the same year. However, in FY23, Google and Shine Agency took the lead, generating revenues of approximately Rs 58 crore for ShareChat. This shift in revenue sources can be attributed to ShareChat’s growing competition with Facebook, particularly through its short video platform Moj, which competes with Instagram.
While ShareChat managed to increase its advertising revenue from Rs 212 crore in FY22 to Rs 255 crore in FY23, the company also experienced a rise in various expenses. Server rent expenses increased by 21 percent from Rs 845 crore to Rs 1,022 crore, content development costs surged by 50 percent from Rs 422 crore to Rs 633 crore, and foreign exchange losses ballooned from Rs 55 crore to Rs 239 crore. Moreover, the company’s financing costs soared nearly four-fold from Rs 90 crore in FY22 to Rs 340 crore in FY23.
Despite these financial challenges, ShareChat remains optimistic about its growth potential. The company reported higher sales for its Chatroom service, which increased from Rs 120 crore in FY22 to Rs 285 crore in FY23. Moreover, ShareChat recently raised $3 million in funding for its robotics startup, led by its co-founders, Bhanu Pratap Singh and Farid Ahsan.
Q: Who were the highest-paid executives at ShareChat in FY23?
A: In FY23, the highest-paid executive at ShareChat was the Chief Financial Officer, Manohar Charan, who received a total compensation of Rs 3.11 crore.
Q: What caused the significant increase in net losses for ShareChat?
A: ShareChat’s net losses rose by 72 percent primarily due to rising expenses, including server rents, financing costs, foreign exchange losses, and provisioning for doubtful assets.
Q: Which companies were ShareChat’s biggest revenue drivers in FY23?
A: In FY23, ShareChat’s biggest revenue drivers were Google and Shine Agency, both contributing approximately Rs 58 crore each.
Q: Did ShareChat lay off employees in FY22?
A: Yes, ShareChat let go of around 700 employees in FY22 but still experienced a 38 percent increase in employee benefit expenses from Rs 505 crore to Rs 698 crore.