Sharechat parent losses widen to Rs 5,144 Cr in FY23
In the period ended March 2023, expenses related to depreciation and amortisation linked to short video app Takatak soared to Rs 1,920 crore, from Rs 24.4 crore in the previous year.
Video sharing platform's parent company Mohalla Tech Pvt Ltd saw its losses widen to Rs 5,144.25 crore in FY23, a 72% jump from Rs 2988.63 crore in FY22.
The company's revenue from operations stood at Rs 552.73 crore in FY23 compared to Rs 2,988.63 crore a year ago.
The major expense came from the write-off related to short video platform Takatak. In the period ended March 2023, expenses related to depreciation and amortisation linked to Takatak soared to Rs 1,920 crore, from Rs 24.4 crore in the previous year.
Sharechat acquired Takatak in February last year.
Founded in 2015 by IIT-Kanpur graduates Ankush Sachdeva, Farid Ahsan, and Bhanu Pratap Singh, ShareChat is a social media platform that operates in various regional languages, including Hindi, Tamil, and Telugu. In 2017-2018, the platform quickly became the poster child for non-English content apps, attracting investments from Shunwei Capital and Lightspeed Venture Partners.
The company laid off about 20% of its workforce in January this year, shortly after shuttering its fantasy gaming division Jeet11.
Most recently, ShareChat's co-founders Ahsan and Singh—who have stepped down from their active roles at the company—raised $3 million in funding for their robotics startup from Elevation Capital, India Quotient, and a few angel investors.
As per the company's regulatory filings, the intangible assets related to Takatak failed to generate the expected cash flows, which led to an accelerated amortisation over a one-year period instead of a two-year period.
The acquisition, which was valued at Rs 1,838 crore (Rs 801 crore cash and debentures of Rs 1,037 crore), witnessed a payment of Rs 1,609 crore. According to ShareChat, the outstanding payment remained unpaid due to non-fulfillment of the deal's terms.
Edited by Affirunisa Kankudti