ShareChat’s ESOP pool valuation nears $70 Mn with expansion

Newly minted unicorn ShareChat has expanded its employee stock options or ESOP pool, joining the league of many such startups who have added significant shares to their pools or schemes in the past year.

The vernacular social media cum short video entertainment platform has expanded the pool from 100,000 options to 220,000 options, regulatory filings show. According to Fintrackr’s estimates, the addition of new options is worth Rs 280 crore.

With the expansion, the size of ShareChat’s overall ESOP pool is anywhere between Rs 460 crore to 513 crore ($62-70 million). In September, the Bengaluru-based company had expanded its ESOP pool to $35 million. 

The expansion has come weeks after the company's mega $502 million Series E round in which Tencent alone had put in $225 million via the debt route, followed by Lightspeed and several others.

The new funding consists of two rounds - Series F and F2. Tiger Global and Lightspeed had led the F2 round and had valued ShareChat in the range of $1.95 to 2.18 billion. 

With large funding rounds across growth-stage startups in India now becoming very frequent, the trend of expanding the ESOP pool has picked up and now spreading.

ShareChat joins other growth-stage companies such as Chaayos, Nykaa, Razorpay, Swiggy and several others who have expanded their ESOP pool in 2021. 

Digital payments major Paytm recently expanded its ESOP pool, which now stands at $604 million.

Besides Paytm, Oyo and Byju’s are the other two startups that have ESOP pools worth over Rs 3000 crore or $400 million. According to Fintrackr, Oyo’s and Byju’s ESOP sizes are worth Rs 4,300 crore or $580 million and Rs 3,000 crore or $400 million respectively.

Founded in 2015, ShareChat’s core business is a vernacular-focused social media platform. However, it has been betting big on its short video entertainment app Moj after a ban on TikTok and other China-linked apps last May.

According to Sensor Tower data, Moj has been downloaded close to 69 million times in the past three months while ShareChat has recorded 24 million downloads during the period.

While Moj is a new product and its monetisation would take time, ShareChat requires to find more ways to churn significant revenues from its core social media product.

According to Fintrackr, the six-year-old company had collected operating revenues of Rs 9.4 crore during FY20 with a whopping loss of Rs 676.85 crore.