The startup landscape has seen numerous instances of companies facing breakdowns, where investor trust waned, leading co-founders departing with allegations of financial irregularities. A notable case is social e-commerce company Trell: once a promising startup but now possibly on the verge of collapse.
While the company has held off from announcing something as drastic as a formal closure, its financial statements paint a bleak future. Its revenue from operations declined 94% to Rs 4.77 crore in FY23 from Rs 80.6 crore in FY22, according to its annual financial statements filed with the Registrar of Companies (RoC).
Trell used to be a social commerce platform until a year ago but the firm pivoted to become a lifestyle-centric short video app in early 2023.
Income from the commissions was the largest revenue source for Trell which dwindled by 94.7% to Rs 2.23 crore in FY23 from Rs 42.37 crore in FY22. Advertising, e-commerce, logistics, and other income drivers also saw a major fall during the previous fiscal year (FY23).
Visit TheKredible for a detailed revenue breakdown.
The company laid off hundreds of employees during FY23 which squeezed its employee benefit costs by 69% to Rs 33.7 crore in FY23 from Rs 108.2 crore in FY22. It also restricted its ad spending by 95.3% to Rs 11.3 crore in the last fiscal year.
The firm’s legal-professional, technical-engineering, communication, and other overheads took its total overall expenditure to Rs 64.3 crore in FY23 where the amount stood at Rs 413 crore in FY22. Head to TheKredible for a complete expense breakup.
Expense Breakdown
https://thekredible.com/company/razorpay/financials
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https://thekredible.com/company/razorpay/financials
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- Employee benefit
- Advertising promotional
- Legal professional
- Technical And Engineering
- Telephone and Communication
- Others
With a revenue of Rs 4.7 crore in FY23, the company posted a loss of Rs 58.6 crore in FY23. Meanwhile, its EBITDA margin worsened to -941.4%.
On a unit level, it spent Rs 13.48 to earn a rupee in FY23.
Trell has raised over $60 million and was reportedly in talks with Amazon to raise a new round at a unicorn valuation in early 2022. However, the deal did not go through. In 2023, the company’s early backer Peak XV Partners also made an exit with a nearly 80% haircut.
Responding to our queries, a Trell spokesperson said, “We are pivoting our business model from social commerce and figuring out the next phase of the journey with our investors.”
Quite simply, in India, lest it be forgotten, almost every model has to be rated as better than an ad-driven model. A penny-pinching advertising market dominated by massive global platforms and a few local players leaves very little on the table for smaller entrants. However well funded they might be, as seen by the likes of Sharechat and others. That Trell, with all the data and narratives in front of it, chose to still try the impossible, simply points to the compulsions the founders must have been under.
From reports of financial irregularities that dogged it in 2022 to the failure to scale the short video approach, the firm has well and truly bombed. While the times when it was flirting with a unicorn valuation might seem distant, it is instructive to think it was less than 20 months ago. The only positive in this whole episode seems to be that Trell’s final pivot has lived up to the dictum of fail fast at least.
