Startup Trell Shifts to Advertising-Centric Model Amidst Financial Irregularities
Indian social media startup Trell's dramatic shift, and allegations of financial irregularities, led to the layoff of 75% of its workforce, and Sequoia Capital's $500k loss
15 February 2023
Indian social media startup Trell has shifted its focus from social commerce to an advertising-centric business model.
The company has faced allegations of financial irregularities and has laid off 75% of its workforce.
Sequoia Capital India, which had invested in Trell, sold its shares to a small investor and then to investment banking firm Merisis Advisors for $500k.
Trell, an Indian social media startup that was as soon as surprisingly regarded using undertaking capitalists, has considered a dramatic shift in fortunes over the previous year. The enterprise has been beset by allegations of monetary irregularities and has shifted its center of attention from social commerce to an advertising-centric commercial enterprise model. In addition, the organization has laid off 75% of its workforce. Sequoia Capital India, which had invested in Trell, reportedly offered its shares in mid-2022 to a “small investor,” and then later sold its stake to investment banking firm Merisis Advisors for $500k. Sequoia did now not invest in Trell’s Series B or Series C funding rounds, but still held a 5.23% stake in the company.
In the aftermath of the TikTok ban in 2020, Trell used to be one of several Indian startups searching to fill the hole left using the famous social media app. Trell raised over $60m to pursue the quick video-driven social commerce opportunity. The corporation launched marketplace operations and onboarded retailers and even ventured into so-called stay commerce. Trell raised $45m in its biggest funding round to date, with investors such as fashion retail massive H&M and electronics fundamental Samsung’s VC arm. Representatives from H&M and Samsung now sit on Trell’s board.
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However, social commerce proved to be a difficult market to crack, and Trell's experiments in this vicinity were now not successful. With a unicorn valuation round with Amazon on the horizon, Trell had to change its commercial enterprise model. Trell is now specifically an ad channel for brands. The employer earns income from the views it good points on its quick video app, which points content material from social media influencers.
Sequoia was reportedly sad about no longer being included in Trell’s Series C funding round, which was oversubscribed. The undertaking capital association was stated to be interested in investing in Trell’s Series C spherical in early 2022, but there used to be no room for the agency to participate. Trell had been close to signing a period sheet for a funding round when allegations of monetary irregularities emerged.
Sequoia's sale of its stake in Trell to a small investor and Merisis Advisors represents a tremendous loss on its initial investment. However, it is unclear how a lot of a loss the VC firm incurred. Trell's value had appreciated notably between Sequoia's funding and the sale of its stake.