Zilingo, founded in 2015 by Ankiti Bose and Dhruv Kapoor, began as an ambitious e-commerce platform aiming to connect small South-East Asian businesses with a global audience. Ankiti Bose, an ex-McKinsey and ex-Sequoia employee, envisioned leveraging technology to empower local businesses to reach beyond their market stalls. Zilingo started as an online marketplace for Southeast Asian shops, offering a range of products from clothing to artwork.
Over the years, Zilingo evolved its business model to address two critical challenges faced by small businesses: expanding customer reach and improving operational efficiency. In addition to being an e-commerce platform, Zilingo ventured into B2B services, providing operational, sourcing, and financial solutions for merchants. The platform offered capital loans, insurance, stock management tools, and supply chain solutions.
The company gained substantial traction and investor interest, securing significant funding in various rounds. By 2019, Zilingo reached a valuation of $970 million and was on the verge of becoming a unicorn. The expansion involved onboarding thousands of merchants and brands and creating a vast network of suppliers and factories.
However, the success on paper concealed the underlying challenges that ultimately led to Zilingo’s downfall:
- E-commerce Cash-Burn: Zilingo’s core, despite the B2B aspirations, remained rooted in B2C e-commerce. The company adopted aggressive cash-burn strategies, discounts, and heavy marketing spending to compete with e-commerce giants like Lazada and Shopee. The e-commerce wing became a financial sinkhole with low margins, draining resources from the B2B side.
- Buggy Tech and Operational Inefficiency: Zilingo lacked internal software to efficiently manage its diverse e-commerce marketplace and B2B solutions. The absence of adequate technology resulted in operational inefficiencies, with manual processes and a lack of essential features for client onboarding during the early years.
- US Expansion and Pandemic Impact: Zilingo’s move to expand into the US market in 2019 faced setbacks, and the subsequent global lockdowns due to the COVID-19 pandemic further disrupted the company’s growth plans.
- Scandal and Leadership Crisis: In 2022, Zilingo faced a severe blow when accusations of financial irregularities led to the suspension of CEO Ankiti Bose. Ankiti, in turn, accused the company of sexual harassment. The leadership crisis, coupled with the departure of key figures, intensified Zilingo’s challenges.
The cumulative effect of these factors plunged Zilingo into a dire financial situation, with losses surpassing revenue. In a surprising turn of events, the board suspended Ankiti Bose, and the investors pushed for the liquidation of Zilingo’s assets. Ankiti and Dhruv, despite the tumultuous situation, expressed faith in Zilingo’s B2B vertical and offered to buy the company at half its previous valuation.
Ultimately, Zilingo’s journey serves as a cautionary tale about the perils of e-commerce cash-burn, the importance of robust technology, the impact of external crises, and the significance of leadership in navigating challenges.
Despite having a promising B2B vertical, Zilingo’s financial troubles and leadership crisis led to its untimely demise in 2022