Exclusive: ShareChat adds fresh ESOPs worth $123 Mn

Mohalla Tech, the parent entity of the vernacular social media platform ShareChat and short video entertainment app Moj, has added fresh employee stock option (ESOP) options for its employees under its existing ESOP plans.

The development occurred shortly after the announcement of raising $49 million in debt from existing investors.

The board at ShareChat has approved a special resolution to add 260,000 employee stock options to its existing plan, bringing the total ESOP pool to 846,300 options, its regulatory filing accessed through the Registrar of Companies (RoC) shows.

Importantly, every 100 stock options will be converted into one (1) equity share at a later date decided in the agreement.

The objective of expanding the ESOP pool is to promote employee ownership as well as to attract, retain, and motivate talents.

As per Fintrackr’s estimates, the newly added ESOPs are worth Rs 1,017 crore or $123 million while the value of the total ESOP pool stood at Rs 3,310 crore or $400 million.

According to startup data intelligence platform TheKredible, ShareChat has raised around $1.2 billion from investors including Twitter (now X), Alkeon Capital, Moore Strategic Ventures, and Tencent, among others.

Despite mopping up more than $1 billion, the company wasn’t able to show substantial revenue as of FY23. Struggle in monetization led to a steep fall in valuation which stood at less than $2 billion in the recent bridge round. The firm was valued at $5 billion during its last fundraise in June 2022. During the last fundraise, it also announced to double the ESOP ownership for all of its current employees.

During FY23, ShareChat had to spend nearly Rs 4,000 crore to earn Rs 533 crore in revenue. On a unit level, the firm spent Rs 7.16 to earn a rupee of operating revenue in the last reported fiscal. This was one of the highest expense-to-revenue ratios for a unicorn in FY23.