Mohalla Tech, the parent company of the vernacular social media platform ShareChat and short video entertainment app Moj, has expanded its employee stock option (ESOP) pool significantly. This move follows the recent announcement of raising $49 million in debt from existing investors.
According to regulatory filings accessed through the Registrar of Companies (RoC), the board at ShareChat has approved a special resolution to add 260,000 employee stock options to its existing plan. This expansion brings the total ESOP pool to 846,300 options. Each 100 stock option will eventually convert into one equity share at a date specified in the agreement.
The newly added ESOPs are estimated to be worth Rs 1,017 crore ($123 million), while the total ESOP pool is valued at Rs 3,310 crore ($400 million), as per Entrackr estimates. This strategic move aims to promote employee ownership and attract, retain, and motivate top talent within the company.
ShareChat has raised approximately $1.2 billion from investors such as Twitter (now X), Alkeon Capital, Moore Strategic Ventures, and Tencent. Despite securing over $1 billion in funding, the company has struggled with substantial revenue generation as of FY23. This monetization challenge resulted in a steep decline in valuation, now standing at less than $2 billion in the recent bridge round, down from $5 billion in June 2022. During the last fundraiser, ShareChat also announced a plan to double ESOP ownership for all its current employees.
In FY23, ShareChat incurred expenses of nearly Rs 4,000 crore to generate Rs 533 crore in revenue. On a unit level, the firm spent Rs 7.16 to earn a single rupee of operating revenue, marking one of the highest expense-to-revenue ratios among unicorns in FY23.
This expansion of the ESOP pool underscores ShareChat’s commitment to fostering a sense of ownership among employees and incentivizing them to drive the company’s growth and success. The company remains focused on improving its financial performance and monetization strategies to enhance its market position and valuat
Source: Entrackr
