Mohalla Tech Pvt., the unicorn behind the social network ShareChat and short video app Moj, faces financial challenges as the company registered a loss of ₹5,144.2 crore in FY23.
Despite a rise in consolidated revenue from operations to ₹552.7 crore from ₹346.9 crore in FY22, the company’s losses widened from ₹2,988.6 crore in the same period, as per data from Tofler, BQ Prime reported.
The accumulated loss for the company now stands at ₹10,539.2 crore. Notably, it expended INR 7.46 to earn one rupee.
Established in January 2015 by Ankush Sachdeva, Bhanu Singh and Farid Ahsan, Mohalla Tech’s ShareChat challenges Facebook, Instagram, Koo in Indian social media market.
ShareChat reported a notable surge in losses, mainly attributed to the write-off associated with its acquisition of MX Takatak, a rival short video platform, The Arc reported.
In the fiscal year ending March 2023, expenses related to depreciation and amortization linked to Takatak, soared to ₹1,920 crore, a substantial increase from the previous year’s ₹24.4 crore.
Following the acquisition in February 2022, ShareChat decided to close MX Takatak, transitioning users to its short video app, Moj. The comprehensive deal, valued at ₹1,838 crore ( ₹801 crore cash and debentures of ₹1,037 crore), witnessed a payment of ₹1,609 crore. The outstanding amount remained unpaid due to the non-fulfillment of the deal’s terms.
In its annual filing, the company explained that the intangible assets from the MX Takatak acquisition failed to generate anticipated cash flows, leading to an accelerated amortization over one year instead of the initially planned two years, the report said.