Transaction tax

Struggling Trell gets a lifeline; Crypto Trading Volumes Drop Amid New Tax Laws

Since the time we at ETtech first broke the story of an EY probe on Trell on March 12, a lot has happened at the start of social commerce. Today we reported on a stake sale executed by the company where it sold its stake in AppsForBharat to investors to provide much needed cash. All this and more in editing.

Credits: Giphy

Also in this letter:
■ Volumes on crypto-trading platforms decline as new tax standards
■ Paytm Payments Bank has not yet appointed a firm for the IT audit: MoS finance
■ Elon Musk unveils 9.2% stake in Twitter

Investors buy Trell’s stake in AppsForBharat for $7 million

Sale of Trell stake

Influencer-run social commerce app Trell, which has been investigated for financial irregularities, has sold around 10% of its stake in AppsForBharat to one of its existing investors, Mirae Asset, it said. several sources informed about it. The secondary transaction also saw Middle East-based MSA Novo buy shares in Trell, a person familiar with it said..

  • Mirae owns nearly 11% of Trell according to its latest stake
  • Sequoia Capital is a joint investor in Trell and AppsForBharat

What does Trell do

Offer details: The $9-10 million deal is an effort by the company to stay afloat even as the startup has laid off about 200-300 of its employees, another person with knowledge of the matter said. . “This will be used as a lifeline for the business to rise…it’s enough money to survive the next 12 months…” said one of the sources quoted above.

troubled times: A forensic team from EY India investigated Trell’s alleged related party transactions, misreporting of company numbers and other financial irregularities.

AppsForBharat, a product studio for spiritual and devotional content, was founded by Prashant Sachan, one of the founders of Trell. Sachan left Trell and sold his entire stake last year, as ET first reported on March 21.

Trell's Troubles History So Far

Details: Sachan said he first diluted the majority of his stake in Trell by transferring it to the executive stock option plan (Msop) in December 2020. He then sold his remaining stake, around 1.5% , to LogX Venture Partners and syndicate LetsVenture in October 2021.

Trell had received a 17% stake in AppsForBharat for Rs 85,000 because Sachan started working on it while at Trell. It then diluted its stake to around 10% as AppsForBharat closed two funding rounds of around $14 million from Elevation Capital, Sequoia Capital India, Beenext and Matrix Partners India.

Volumes on Crypto-Trading Platforms Decline as New Tax Norms Go Into Effect

crypto trading platforms

After the implementation of the new digital asset tax rules on April 1, India’s crypto trading volumes plunged.

Trading volumes on cryptocurrency exchanges fell 30-70% after hitting a monthly peak on March 31. We reported on April 1 that up to 50% of cryptocurrency platforms’ volumes will evaporate once the new tax standards are fully in effect.

Yes but why? Volumes on major crypto-trading platforms jumped on the final day of the financial year as traders adjusted their positions ahead of a new tax regime governing virtual digital assets (VDAs) taking effect on April 1 .

On April 3, volumes on these trading platforms were down 30-50% from March 31, according to data compiled by secondary research firm Crebaco, but were flat from April 2.

Crypto trading declines amid new tax rules

Read also : The Profile of Crypto Investors Changes as Tax Regulations Go Into Effect

Tax issues: The new laws tax crypto income at a single rate of 30% and do not allow losses to be offset against gains. A withholding tax (TDS) of 1% will also come into effect from July, when crypto platforms expect major success, as intraday traders account for a large portion of daily volumes.

Quote: “Trading volume was highest on March 31 as users/investors settled their positions before the start of the new fiscal year. From April 1 there was a decline, which is a usual trend in the beginning of each fiscal year, however, this year we are seeing a steeper decline due to strict tax laws,” said Minal Thukral, Senior Vice President, Growth and Strategy, CoinDCX.

Tweet of the day

Paytm Payments Bank has not yet appointed firm for IT audit: MoS funding to Lok Sabha

Paytm Payment Bank

Minister of State for Finance Bhagwat Karad told the Lok Sabha today that Paytm Payments Bank has yet to appoint a firm to carry out an audit of its information technology (IT) systems.

Karad in Parliament: “The RBI (Reserve Bank of India) has further informed that Paytm Payments Bank Limited has yet to appoint the IT audit firm to carry out a comprehensive audit of the bank’s IT system.”

Catch up fast: Paytm Payments Bank has been instructed to appoint an IT audit firm to carry out a comprehensive audit of its IT systems.

Earlier in March, ET announced that the central bank would set the terms of reference for an independent technology audit of Paytm Payments Bank. It was a follow-up action after the regulator banned new customer onboarding for alleged breaches of customer acquisition and privacy rules that could have included a possible flow of data to companies from Chinese origin.

Not the first time: This is the second time Paytm has faced a regulatory ban. In June 2018, RBI had made some observations about the processes the company follows to acquire new users, particularly with regard to know-your-customer (KYC) standards. RBI’s response to the RTI (right to information) question also mentioned that Paytm failed to maintain the end-of-day balance limit of Rs 100,000 per account.

Closed deals ETtech

Closed deals ETtech

■ Agrotech start-up based in Bengaluru Agrizy announced Monday that it has raised $4 million in a funding round led by Ankur Capital. The round also saw the participation of Omnivore and angels such as Rajesh Yabaji (CEO, BlackBuck), Zetwerk co-founders Srinath Ramakkrushnan, Amrit Acharya, Rahul Sharma and Vishal Chaudhary, among others.

■ Hyper-social gaming platform Play in Mumbai raised $7 million, led by Kalaari Capital. Online gaming platform Winzo also participated in the round along with Lumikai Fund, Leo Capital and PlayCo, AdvantEdge VC and AMEA Ventures. The company plans to invest the new funds in scaling its “hyper-social” gaming offerings, supporting upcoming projects and allocating capital to product development.

Elon Musk unveils 9.2% stake in Twitter

Elon Musk

Tesla Inc CEO Elon Musk has acquired a 9.2% stake in Twitter Inc, according to a regulatory filing released Monday, making him potentially the largest shareholder in the microblogging site.

Take stock: Twitter shares soared 26% in premarket trading after the filing, following Musk’s tweet saying he was seriously considering building a new social media platform.

Musk owns 73.5 million shares of Twitter, valuing his passive stake in the company at $2.9 billion based on Friday’s stock close. The shares are held by Elon Musk Revocable Trust.

Musk, a prolific Twitter user, has more than 80 million followers on the site since joining in 2009 and has used the platform to make several announcements, including teasing a privatization deal for Tesla that led him to regulatory review.

However, he recently criticized the social media platform and its policies and said the company undermines democracy by failing to uphold the principles of free speech.

Today’s ETtech Top 5 newsletter was curated by Arun Padmanabhan in New Delhi and Aishwarya Dabhade in Mumbai. Graphics and illustrations by Rahul Awasthi.