SINGAPORE (Mar 11): Entrepreneur Ankiti Bose is uncomfortable with her start-up being described as a “unicorn”. Reports of her e-commerce service and solutions platform, Zilingo, being worth almost US$1 billion ($1.35 billion) is, for her, a distraction at best.
She is not trying to be precious about the fact that sources value her three-year-old company at US$970 million, which has earned it the “unicorn” label. Rather, it is incongruous to the reality of sweaty, humid nights holed up in a small apartment in Bangkok, packing 1,000 cardboard boxes by hand to Zilingo’s first 1,000 customers.
“We started with just a bunch of us in an Airbnb in Bangkok in 2015, trying to make sense of the Southeast Asian supply chain, the enormous opportunities here and what we were trying to build,” Bose recounts in a recent interview with The Edge Singapore. “We were six friends in a small apartment, packing boxes by hand, because we refused to pay someone to do it.”
As she describes it, it was a “serendipitous” meeting she had with her co-founder Dhruv Kapoor over some beers at her home in Bangalore, when they both realised they shared a common dream of starting a company. With Kapoor, she started Zilingo as a platform to help small businesses sell directly to customers in 2015.
At that time, Bose had already spent three years working in venture capital and management consulting at Sequoia Capital and McKinsey & Co. It was while she was on a holiday in Bangkok that she came up with the idea to help small merchants sell their products more effectively online. One of the first tasks was to help merchants overcome the inefficient infrastructure that characterises much of Southeast Asia — a vast and fast-growing, but fragmented, market.
“We began with basic things such as internet connection, payment systems, logistics. [For example,] who is going to pick up [clothes] from a small warehouse in Chiang Mai and deliver it to Jakarta? Now, when a merchant logs on to Zilingo, it’s light, mobile-friendly, data-friendly, and there are 25 API [application programming interface] integrations with all kinds of local logistics partners such as DHL or Ninja Van. This would not have been possible before for many of the small merchants,” Bose explains.
After Zilingo helped connect sellers to buyers, Bose turned to her next problem: How could she help these merchants do better?
Helping the little guys
“By 2016, we realised our purpose was to truly serve the merchant,” Bose says. “A merchant could log in to Instagram and start selling there, but their business has a lot more problems than selling to the customer. For example, how will they procure? How will they get access to working capital? Who will give them data on what they should or should not sell?”
Bose noticed a lot of the small sellers were disenfranchised, as the odds were stacked against them. “You know how they say fashion is exploitative? Well, it is! These [small] guys make nothing. We thought we should fix it, [or] at least try to. So, we took the challenge of procurement head on, and we launched our B2B marketplace,” she says. “This was our ‘a-ha!’ moment.”
The Zilingo B2B marketplace allows smaller retailers, those struggling with low margins and middlemen, to purchase directly from the manufacturers. By May 2017, the B2B marketplace took off and now contributes about 70% of Zilingo’s revenue. Then, in 2018, Zilingo also began to offer financial services, using its platform to connect merchants with third parties who will provide credit.
“No matter how badly a bank wants to partner a small entrepreneur, how can they? [The entrepreneur] often has no credit score, and no history. We thought we’d take the risk, and we came up with indicators that would evaluate whether the merchants were ‘good’ or ‘bad’ actors,” Bose says.
Empowering women
Today, Zilingo has 420 employees worldwide. The company is headquartered in Singapore and has offices in Jakarta, Bangkok, Hong Kong, Bangalore, New York and Manila. Since it launched its fully stacked services for merchants, Zilingo’s revenue has quadrupled over the past year, on the back of 12 times’ growth in the preceding year.
About 65% of Zilingo’s merchants, and half of the company’s staff and leadership, are women. Bose says, “When you start investing in [small and medium-sized enterprises], you will end up empowering women. I have been to the factory of a woman in Indonesia who runs a factory making 20,000 shoes a month and Zilingo has helped her with financing. I’m proud to say we’ve made a real difference.
“The same thing is replicated in our team. While we are a fashion and retail platform, our talent is predominantly from the tech industry, and that is usually male-dominated.”
The company has also announced that it has raised US$226 million in Series-D funding from Sequoia Capital, Temasek, Burda Principal Investments, Sofina, Singapore investment fund EDBI and existing investors. That brings the total of funding raised to US$308 million since its inception.
The company now plans to use the latest round of funding to invest in the infrastructure and tech needed to further integrate and digitise the beauty, fashion and lifestyle industry.
Still, Bose is not letting the heady excitement get to her. She says valuations are morale boosters, just like the hype surrounding Zilingo’s almost-meteoric rise over two years.
“About the term ‘unicorn’: We’ve thought about this a lot. We feel that talking about valuations is distracting for the team and the people associated with us,” she says. “We want to be known as a retail e-commerce company that has sustainable growth and revenues with a path to profitability, and that has stood us in good stead so far.”
