Trell in final stages of selling stake in AppsForBharat in $8-9 mn deal

Social commerce platform Trell is at the final stages of selling its minority shareholding of around 10 per cent in AppsForBharat to Mirae Asset Management and MSA Novo for $8-9 million, according to sources close to the development.

Apps For Bharat is a spiritual content platform founded by Prashant Sachan, one of the co-founders of Trell, who left the social commerce company at the end of 2020 to work on the new start-up. Several reports have alleged that an audit by EY has found related party transactions between the two companies, among other financial irregularities such as inflation of sales figures.

The company denied all the reports, but refused to comment on the specifics of the matter.

“This deal has been in the works for the last eight months and was not started after the review, which itself happened sometime in January and February. However, some of the issues that were highlighted are being worked upon,” said a source close to the developments.

“While Prashant had a stake in Trell when he left, it was slowly liquidated. He currently does not own any shares in the company,” he added.

Meanwhile, several employees in the company said that many of their co-workers are leaving voluntarily as they fear layoffs may be imminent. However, they said that the company management has not communicated anything as such yet even as several reports claimed that 50 per cent of the employees might be laid off.

In January, Trell had conducted an employee stock option buyback of Rs 12 crore and had said at the time that it had an employee strength of over 700.

“Fortunately, a lot of recruitments are happening in start-ups and everyone saw how fast Trell grew. The company has also cut short its notice period for some people who wanted to leave,” said a source in the know.

“Some of the VPs are leaving. One of the top executives who looked after monetisation left last week. Interestingly, no one in a company WhatsApp group of around 300 people has muttered a word about these things since the controversy erupted,” he added.

The company, which had raised $45 million in its Series B round last year, was looking to raise funds at $700 million - $800 million valuation from Denmark’s Bestseller and at $1 billion valuation from Amazon, but those talks have reportedly stalled amid the allegations of financial irregularities.

“The focus right now is on restructuring the business, tightening the controls and other processes in the company. There is also a lot of focus on profitability,” said a source close to the developments.

Founded in 2016 by Arun Lodhi, Bimal Kartheek Rebba, Prashant Sachan and Pulkit Agrawal, the company said in January that it has over 60 million Monthly Active Users (MAU) and offers content in multiple categories across 12 languages. The platform has raised more than $62 million from marquee investors such as Mirae Asset, H&M Group, Samsung Ventures and LB Investments, among others.