B2B retail tech startup Arzooo, floated by former Flipkart executives, has reportedly sold its assets to distribution and supply chain company Moksha Group in a distress deal.
As a part of this deal, Moksha Group will own Arzooo’s technology platform and its various intellectual property assets and trademarks. Additionally, the company will also acquire Arzooo’s private label brand, ET reported, citing sources close to the matter.
However, the financial terms of the deal were not disclosed.
Inc42 has reached out to Arzooo for comments on the development. The story will be updated based on its responses.
“The company’s troubles started after they overspent last year during the Diwali sales, giving heavy discounts and incentives to retailers,” a source told ET.
The source further added that one of the company’s lenders also pulled the credit line, resulting in a capital crunch. Arzooo has been in talks for the sale since early 2024 and had held discussions with other B2B companies as well.
It is also said that the startup reportedly laid off several employees over the past one year.
With this acquisition, the existing equity backers of Arzooo are likely to write off their investments.
Founded by Khushnud Khan and Rishi Raj Rathore in 2018, Arzooo raised $70 Mn in its Series B round from Japan-based SBI Investment and Trifecta Leaders Fund. Celesta Capital, 3 Lines VC, and Doordash founder Tony Xu also participated in the round.
Earlier this year, the startup raised fresh funds as a part of its extended Series B round. However, the company didn’t disclose the financial terms of the deal.
The startup’s operating revenue surged over 4X to INR 1,117.4 Cr in FY22 from INR 258.7 Cr in FY21. Despite the rise in the revenue Arzooo’s loss widened 3.5X to INR 62.7 Cr in FY22 from INR 17.9 Cr in FY21 due to increase in its cash burn.
