India Quotient to partially exit ShareChat in secondary share sale with 25-30X returns

Ankush Sachdeva’s ShareChat has been in the limelight for raising humongous funds for the past few months.

The vernacular content aggregator has again made headlines as it’s early investor India Quotient is selling partial stake whereby it is expected to earn around Rs 50 crore, which implies 25-30X returns on initial investment for the VC.

Separate from the stake on sale, India Quotient still holds 5 per cent stake in the company which amounts to approximately Rs 165 crore.

Chinese VC Hillhouse Capital is poised to pick up a 1-2 per cent stake through this secondary share sale. The VC has a stellar portfolio in with giants like Tencent, Baidu, Miniso, and AirBnB. It had taken an exit from large Chinese companies like Meituan, Mobike, and JD.com as well. In India, Hillhouse already backs CarDekho.

The investment in ShareChat by Hillhouse comes after it raised Asia’s largest private equity fund of $10.6 billion in September this year.

For ShareChat, this will be second share-based transaction within a span of one month. Earlier in September, it had raised a fresh $100 million Series C round led by Shunwei Capital, along with Morningside Ventures and Xiaomi among others.

Till now, ShareChat has raised around $124 million, which it has invested in various avenues including Machine Learning in order to increase impressions and to weed out inappropriate content.

In an interview with Entrackr, Sachdeva denied upon having any plan for monetization any time soon, however, he did talk of betting on mini app developing platform for developers. For him, the way to beat the heavy competition in content genre is through growth, monetization and revenue comes later, with scale.

The growth drivers for ShareChat lie in the population belonging to tier II, III, and IV cities, and to organise the UGC space for this target audience, there is a lot that ShareChat can invest into, Luckily for the company, it has no shortage in that area as of now.

Further, it remains to be seen in what areas and how efficiently the content app with 10 million DAUs and 25 million MAUs is able to deploy these funds raised through Series C, and secondary share sale.

This development was first reported by ET.