Google and Temasek invest $78 million in ShareChat's parent company, valued at $4.9 billion

Mohalla Tech, the parent company of social media platform ShareChat, has raised $78 million in a Series H fundraising round from Google parent Alphabet and Singapore-based Temasek Holdings for a valuation of $4.9 billion.

According to the company's filings with the Ministry of Corporate Affairs, Mohalla Tech, which also runs the Moj short video platform, has allotted 1,501 Series H CCPS (compulsorily convertible preference shares) at an issue price of Rs 40,44,944 each for a total consideration of Rs 607 crore in cash.

According to the regulatory documents, Mohalla Tech may raise further funds as part of its Series H funding round. This round was led by Google, who put in Rs 405 crore, and Temasek, which put in Rs 202 crore. According to a recent Reuters article, Mohalla Tech is looking to raise $300 million in an investment round led by Google, Temasek, and Times Internet.

According to regulatory records, Google will own a little more than 1% of Mohalla Tech after the transaction, while Temasek would own roughly 2.64 percent.

The news was initially reported by the news website Inc42, which stated that the fundraise appears to be part of a larger round of $250-300 million. ShareChat did not respond to a request for comment.

Mohalla Tech has raised nearly $2 billion in equity capital to date, including this latest round. The company also raised $100 million in debt from China's Tencent Group in February of this year.

The company's funding comes nearly four months after Mohalla Tech bought Times Internet's short video platform MX TakaTak for $600 million in cash and stock and merged it with Moj to combat rising competition in the short video space from Meta's Instagram reels and Google's YouTube Shorts in the world's fastest-growing internet market.

Mohalla Tech is relying on the short-video sector, which is gaining steam thanks to Instagram's Reels. While Facebook's short videos and Instagram's Reels continue to dominate in the top 50 cities, Indian competitors like DailyHunt's Josh, Moj, and MX TakaTak have a considerable user base in tier-2 and tier-3 cities, according to a RedSeer research.

ShareChat had received $226 million at a valuation of $3.7 billion in December last year, with a focus on growing its products to be the leader in the Indian short video and social media industry.

ShareChat was one of the first players in regional language content, founded in 2015 by three IIT Kanpur grads, Sachdeva, Farid Ahsan, and Bhanu Singh. Along with DailyHunt's Josh, it debuted Moj in June 2020, following the TikTok ban, and has witnessed strong growth in the sector. A total of 340 million people utilise ShareChat and Moj.