CNA Explains: The rise and fall of Temasek-backed fashion start-up Zilingo

CNA elaborates: The rise and fall of Zilingo, a fashion startup funded by Temasek, in Singapore: The troubled fashion start-up Zilingo was once hailed as the darling of Southeast Asia’s tech scene and even came close to becoming a unicorn four years ago. However, those days are over for the beleaguered company.

The Economic Times reported on Monday, January 23, that the Singapore-based company had sold its acquired entity nCinga Innovations and its tech assets to Swiss e-commerce management software provider Buyogo AG.

The startup with its headquarters in Singapore began the process of liquidation after the sale was reportedly completed in the first week of January.

The procedure will conclude Zilingo’s months-long struggle for survival, which has shocked the Indian and Southeast Asian tech industries.

What we know about Zilingo is as follows.

From near-unicorn to failure, the business was started in 2015 by Ms. Ankiti Bose and her business partner Dhruv Kapoor to help bring together small fashion retailers in Singapore, Bangkok, and Jakarta on a single platform.

By providing fashion retailers with supply chain capabilities, Zilingo then entered the business-to-business market.

With seller hubs in Hong Kong, Korea, Vietnam, Cambodia, Indonesia, and Thailand, the company was shipping to eight countries by September 2017, adding 5,000 new merchants to its platform.

Some of the most prominent investors in the region, such as Temasek Holdings and Sequoia Capital India, the regional arm of the Silicon Valley firm that backed Apple and Google, contributed $226 million to Zilingo’s fourth round of funding in 2019.

It increased the company’s value to US$970 million, just shy of the US$1 billion threshold needed to be considered a unicorn.

Later that year, Zilingo made the announcement that it would spend $100 million to establish offices in New York and Los Angeles and expand into the United States.

The board, however, became increasingly concerned about the company’s financial performance and wasteful spending as soon as cracks began to appear.

The US$226 million that Zilingo had raised from investors at the beginning of 2019 was gone in less than two years, according to a Bloomberg report.

The COVID-19 pandemic also had a negative impact on Zilingo’s revenue, and the company did not file annual financial statements for two years in 2020 and 2021, which is a fundamental requirement for all businesses of its size in Singapore.

Following allegations of alleged financial irregularities, an investigation into the start-up’s accounts resulted in Ms. Bose’s suspension as CEO in April of that year. She was terminated one month later.

The company’s downsizing continued in the interim. Bloomberg claims that Zilingo had less than 100 employees at its most recent peak in Bangladesh, India, Indonesia, Sri Lanka, and India.

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