Zilingo is an online marketplace for small merchants operating largely in Southeast Asia, named for the “zillions” of products and merchants that its two founders aim to serve. “We envisioned it as an aggregation of opportunities,” says Ankiti Bose, 27, who is CEO and cofounder. She and her fellow Indian cofounder Dhruv Kapoor, 28, made Forbes’ 30 Under 30 Asia list in 2018 and, in February, received $226 million in funding from investors, including Sequoia, Burda Principal and Temasek Holdings in a deal that valued Zilingo at $970 million, according to a source familiar with the matter.
Zilingo has so far signed up 30,000 merchants and has 5 million monthly visitors to its platform, according to Bose. To handle that demand, it has quadrupled its workforce in the past year, to 420 people in offices spread across eight markets—Australia, Hong Kong, India, Indonesia, the Philippines, Singapore, Thailand and the U.S. “Our biggest challenge is figuring how we can scale the DNA of the team in so many different countries,” says Bose, who is now considering expanding to Latin America.
The company was conceived in 2015 when Bose, at the time an investment analyst at venture capital firm Sequoia Capital, and software engineer Kapoor were chatting at a party in Bangalore and discovered they both yearned to start a business. The pair decided then and there to join forces. “It’s not the usual story, where cofounders knew each other for years,” says Bose. “We connected over starting a business together.”
The early days were rough: Since many of the merchants Bose and Kapoor hoped to target were in Bangkok, Bose moved there from Bangalore and started Zilingo’s operations in a small rented apartment. To save money, she and a handful of team members at the time hand-packed products into boxes for shipping.
Having relocated from Bangkok to Singapore and now flush with cash, Zilingo’s business model has evolved. Instead of focusing solely on providing a platform for businesses to sell products to consumers, Zilingo also offers services to merchants selling on other platforms, even rival ones. Zilingo provides merchants with analytics software, management tools, automated logistics and payments systems to help them process orders locally and overseas. Zilingo also offers working capital loans to merchants that can’t get funding from banks, and helps them find manufacturers they can outsource production to in Bangladesh, Cambodia, Indonesia, Thailand or Vietnam.
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Setting up an online storefront on Zilingo’s platform to display and sell products is free; Zilingo instead collects about 15% of the sales made on its platform. Merchants also pay Zilingo for any extra tools and services they subscribe to, such as photo cataloguing or trend monitoring.
Bose expects Zilingo to begin turning a profit within 18 months. However, in 2017, Zilingo posted $6.3 million in losses on $1.3 million in revenue, according to the company’s latest filing with Singapore’s Accounting and Corporate Regulatory Authority. Its 2018 filing isn’t yet available, but the company says revenue grew twelvefold in the year ended March 2018 and quadrupled between April 2018 and January 2019, led by its supply-chain business.
Zilingo’s investors say they remain confident. “I liked the focus on the seller ecosystem, which most other marketplaces consider a low priority,” says Peter Kennedy, a senior adviser at Singapore-based Burda Principal Investments, which since 2016 has invested $60 million in Zilingo, according to the company. Zilingo’s biggest opportunity, he says, is in continuing to build out the ecosystem from “the factory to the ultimate consumer.”
Bose is unfazed by competition from the likes of Alibaba, Amazon and Lazada. “We encourage our merchants to sell on all platforms,” she says. The few competing services that offer such back-end services do so largely for platforms in China, such as Alibaba, giving Zilingo its own niche connecting merchants and manufacturers in Southeast Asia. “There isn’t anything competing directly with us in Southeast Asia,” says Bose. “Merchants where we operate, like Indonesia, Bangladesh and Sri Lanka, don’t have access to the same tech, financial services and channels the Chinese have.”
The key to expanding into new countries and signing up more merchants, Bose says, has been localization. Zilingo tries to make setting up an online business as convenient as possible by providing tools and data on its platform in local languages and training and development programs by its local staff.
Bose credits her experience at Sequoia, where she was able to meet lots of startups, for preparing her for her own entrepreneurial journey. “Starting a company can be isolating and lonely,” she says. “People don’t see the failures; they see only the fundraise announcements and the expansion announcements. It helped to have a network of founders to tell us sometimes that ‘It’s okay.’”