Social media company ShareChat, owned by Mohalla Tech Pvt Ltd, has raised approximately Rs 408 crore (equivalent to $48.89 million) in debt through a convertible debentures round led by Tencent and existing investor Lightspeed. The funding comes at a time when many tech startups are facing a funding winter.

Convertible debentures are a type of long-term debt that can be converted into stock after a specified period. These debentures are typically unsecured bonds or loans, meaning that there is no primary collateral associated with the debt.

HarbourVest, Moore Strategic Ventures, Rimco, and Alkeon also participated in the debt funding, according to regulatory filings sourced from startup data platform Kredible.

ShareChat was valued at almost $5 billion in its last funding round. However, its global peers in the social media space, such as X (formerly Twitter) and Snap, have seen large drops in valuation between the peak of the pandemic era and now.

In December 2023, the company fired 200 employees, around 15% of its workforce, in the second such move this year to cut costs and achieve profitability within the next four to six quarters.

The company recently raised $3 million in seed funding from venture capital firms India Quotient and Elevation Capital and a few high-profile angel investors for its robotics startup General Autonomy.

Backed by investors such as X (formerly Twitter), Google, Lightspeed, and Temasek, ShareChat reported a 59% increase in revenue to Rs 553 crore in FY23 from the previous year, according to the company’s annual financial report sourced from Tofler.

However, the social media firm’s net losses increased by 72% to Rs 5,144 crore in FY23 due to rising server rents, financing costs, foreign exchange losses, etc.

According to a company source, the headline loss number for FY23 is inflated due to multiple notional cost entries and one-time expenses, such as amortisation of goodwill from acquisitions (amounting to Rs 1,903 crore), forex losses on account of restatement of USD-denominated debentures, and accrual of interest on debentures.

Mohalla Tech Private Limited is an Indian Non-Government Company. It’s a private company classified as a company limited by share, with an authorised capital of Rs 5.0 lakhs and 22.352% paid-up capital of Rs 1.12 lakhs. The company is registered in the Mumbai (Maharashtra) – Registrar Office.