ET was the first to report about an
ongoing investigation into the company’s books of accounts on March 12. A forensic team from EY India has now submitted an interim report, four sources with direct knowledge of the matter said. The team is looking into alleged related-party transactions by its founders and other financial irregularities, they said. Trell’s board of directors is likely to act on the EY report over the next few weeks, they added.
The probe has stalled Trell’s existing $100 million funding round, for which it had been in talks with Amazon.
“The company has begun to fire people with immediate effect,” one of these people said. It was not immediately clear how many employees would be fired. News portal Entrackr first reported that the company was in the midst of mass layoffs.
“As we have grown rapidly, our first priority is towards ensuring that we continue to work towards building an institution. In order to ensure that our internal systems and processes kept with our progress, we recently conducted a regular review. In light of the findings, the board has taken a decision to focus on a few core initiatives and strengthen our systems and processes before we plan to raise the next round of funding,”said Trell spokesperson in response to an ET query.
“Unfortunately, this also means that we will have to do some right-sizing within the firm. This can entail some roles getting redundant while there will be new roles that will also be added. We remain deeply committed to our stakeholders and aligned to our vision.”
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The company is also looking to sell its stake in AppsForBharat, a product studio for spiritual and devotional content, sources said. AppsForBharat was launched by Trell founder Prashant Sachan in November 2020. Trell owns about 10% in the company without any governance rights. “AppsForBharat has not received any communication from Trell for buying their stakes in the company,” Sachan told ET in response to a query.
AppsForBharat has raised about $14 million so far. Its backers include Elevation Capital, Sequoia Capital India, BeeNext and Matrix Partners India. Trell declined to comment on this development.
Founded by Arun Lodhi, Sachan, Pulkit Agrawal, and Rebba, Trell offers a mobile app that lets users make and share three-minute videos around their interests and passions, in categories such as beauty, recipes, fashion, personal care, technology and gadgets, movies and TV reviews.
It makes money through Trell Shop, a marketplace for over 600 beauty and lifestyle products from brands such as Plum, Mamaearth, Lakme, Bombay Shaving Company, and The Man Company. It also earns revenue by facilitating collaborations between brands and content creators who review products.
The six-year-old company was valued at $120 million when it raised $45 million in July 2021 from Mirae Asset Venture Investments, H&M, KTB Network, Samsung Ventures, and Fosun RZ Capital.
The company is also backed by Samsung Ventures, Ankur Nagpal (CEO of Teachable), Gokul Rajaram (board member, Pinterest, Square, DoorDash), Vineet Buch (former head of Google Play Store development) and Sequoia’s Surge.
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