Deal focus: Zilingo builds full-service fashion platform

When Zilingo launched in 2015, co-founders Ankiti Bose and Dhruv Kapoor had a straightforward plan: help small fashion merchants in Southeast Asia access the region’s growing middle-class consumer base. But as the company brought merchants onto its online platform, it began to realize that customer access was one of many challenges they faced. Retailers were far more limited by structural defects in the supply chain.

“Chinese engineering and manufacturing are very efficient; they have solved China outbound e-commerce for almost all categories,” says Bose. “For Southeast Asia it’s not solved – it’s mired by outdated technology at all levels, from manufacturing to logistics, payment, and shipping. It’s a huge challenge, but that creates an opportunity for a company like ours.”

Zilingo began to address this opening in 2017, adding a B2B marketplace to help merchants with procurement. Other services followed, including marketing assistance and financial instruments to provide loans for working capital. Over the past 18 months, these supporting operations have grown to account for more than 70% of revenue. 

Now Zilingo is underlining its shift in strategy with a $226 million Series D round, led by Sequoia Capital India and including Burda Principal Investments, Temasek Holdings, and Sofina. The investment is meant to help the company expand to Australia and the Philippines, as well as deepen its capabilities in its current markets of Singapore, Thailand, and Indonesia. 

Zilingo wants to become the go-to partner for Southeast Asian fashion merchants looking to go online, but it has no plans to abandon its original business model. In addition to representing a healthy portion of revenue, the B2C marketplace offers valuable insights into likely market developments.

“They have much more visibility into the latest trends in each market, and that positions them not only to offer the right types of products and styles to merchants, but even to advise merchants on what they should stock for their specific market segment,” says Albert Shyy, the head of Burda Principal’s Singapore office and a member of Zilingo’s board.

The new round features several returning investors, including Burda Principal, which co-led the Series B and C rounds with Sequoia and Sofina, respectively. Zilingo believes the continued support of its existing backers will be essential as it grows, since it is essentially trying to stimulate a complete overhaul of existing Southeast Asian retail practices.

“Where we align very strongly with all of our investors is that there is a lot of value to be added for Asian merchants, which is not something that’s easy to see when most merchants in Jakarta, Manila, or Bangkok have no credit score and no software at their point of sale,” Bose says. “So it’s not just that they can write big checks – they understand there is a long-term vision here, and it will take some time.”   

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• Topics
• Southeast Asia
• Expansion
• Technology
• Consumer
• TMT
• Sequoia Capital
• Burda Principal Investments
• Sofina
• Temasek Holdings
• Growth capital