Local language social networking startup ShareChat has acquired Elanic — a fashion peer-to-peer marketplace, according to two people familiar with the deal. The idea is to foray into the world of social commerce through Elanic as ShareChat looks at different models to monetize on its platform, added the people cited above.
“The deal already went through a few months ago and the Elanic team is now working out of the ShareChat office,” said one of the people cited above, requesting anonymity. “They are experimenting with different ways to use commerce on their app.”
This development comes just weeks after the news of ShareChat’s foray into fantasy gaming through a separate app Jeet11. These moves mark the Twitter-backed startup’s attempt to explore different avenues of monetisation after receiving criticism for high cash burn and no revenue model in sight. The company had posted zero operational revenue in the last fiscal alongside a loss of Rs 414 crore.
ShareChat’s co-founder and chief executive Ankush Sachdeva confirmed that the Elanic team has joined them.
“We acquired talent and certain IPs from the Elanic business,” said ShareChat’s spokesperson in a response to Entrackr’s queries. “We see areas of great innovation from our acquihire in areas of content delivery and commerce.”
ShareChat’s foray into social commerce is expected to increase the frequency of visitors on the app as commerce after garnering a user base of over 60 million monthly active users (MAUs) across 15 vernacular languages who, ShareChat claims, spend 23-25 minutes on average on the platform per day.
“One of the potential ways its social commerce layer would work is that the resellers of existing social commerce companies such as Meesho will post on ShareChat to get customers,” said the second person cited above, requesting anonymity. “Some of the resellers have already started posting on it.”
As for Elanic, it was founded in 2015 by IIT graduates Abhilash Narahari, and Palkush Chawla and Aditi Rohan, whose LinkedIn profile now shows that she works with ShareChat. Since the inception of Elanic’s peer-to-peer marketplace for people to buy and sell clothes, the firm raised money from a few investors including Rebright Partners, TracxnLabs and angel investor Aneesh Reddy.
While the contours of the deal could not be determined, sources say it was a distress sale where the founders made very little money.
Social commerce has been the next battleground for investors and entrepreneurs over the last few years after Flipkart and Amazon established their dominance in the online retail space. Besides the reseller model which includes the likes of Meesho and Shop101, several companies such as BulBul, Simsim, EkAnek have been trying out the video-led social approach in the overall social commerce space.
Gradually, social commerce also started to lure large horizontal e-commerce companies. Paytm joined the bandwagon with MyStore. Entrackr had exclusively reported the entry of SoftBank-backed firm’s entry into social commerce earlier this month. With the aspiration of ShareChat in social commerce, the competition in the space is expected to heat up.