ShareChat, a Bengaluru-based social media platform, has recently laid off over 100 employees on February 22, 2022, as per the reports. The move comes as a shock to many as ShareChat was a prominent player in the consumer industry that targeted non-English speaking audiences. With tons of investment backing, ShareChat had become one of the most sought-after start-ups in India that brought a difference to the content industry.
History and Funding:
ShareChat was founded in 2015 by Farid Ahsan, Bhanu Singh, and Ankush Sachdeva. They started the company with an aim to provide a social media platform that targeted the non-English speaking audience. The initiative that started as a small-scale venture soon gathered the attention of large investors. The company has raised over $1,700 million to date. The primary investors of ShareChat have been Shunwei Capital, Xiaomi, Lightspeed Investment, and Twitter. The last funding round of ShareChat took place in September 2021 when it raised $145 million..
Performance and Growth:
ShareChat had grown rapidly within a short period and had over 160 million active users in India. As per the reports, ShareChat’s valuation stands at approximately $3 billion. The platform had gained recognition for its user-generated content, which was available in regional languages. The application started to take off after the Indian government banned Chinese applications in 2020. This incident benefitted ShareChat as it received a massive influx of new users from India who were in search of a social media platform.
Reasons for Layoffs and Impact:
The emergence of Covid-19 has affected the global economy in unprecedented ways. The pandemic-induced recession has had adverse effects on most of the industries, including conglomerates. ShareChat was no exception to the unfavorable environment, leading to a significant decline in user engagement levels. Reports suggest that ShareChat had to lay off over 100 employees, amounting to around 25 percent of its workforce. The company also decided to wind down its subsidiary venture, Jeet11, which was a fantasy sports app. The move from ShareChat came as a strategic decision as the company intends to prioritize its core business and interests.
Statement from ShareChat Stakeholders:
The layoffs at ShareChat have sparked a lot of criticism from stakeholders and the media. Critics have cited ShareChat’s success and high valuation as reasons to question the reason behind such a decision. However, in response to the layoffs, the company’s spokespeople released a statement saying, “We are committed to providing the best possible outcome for our employees. The pandemic has had an impact on the way we do business, and we need to make tough decisions to protect the long-term interest of our stakeholders.”
In conclusion, ShareChat’s decision to layoff employees and wind down its fantasy sports venture may come as a surprise for many, given the company’s astounding growth and funding success. But, it is essential to remember that companies are always looking out for their best interests, and decisions like these should be taken with a long-term perspective. ShareChat remains one of the most innovative social media platforms in the Indian market, and it will be exciting to see how the company will handle the uncertainty around the post-pandemic world.