Zilingo in Singapore to Shut Down Following Fashion Startup Struggles

Zilingo Pte Is Set To Enter Liquidation, Capping a Months-long Crisis That Shocked Asia’s Technology And Startup Industries.

The company has been struggling to stay afloat since last year, when it was hit by a series of setbacks, including the withdrawal of a key investor and the departure of its CEO.

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The board of directors of the Singapore-based fashion-tech company has appointed EY Corporate Services Pte as provisional liquidator, according to sources familiar with the matter. The board is said to have informed major shareholders and creditors of its decision. When contacted for comment, the board declined to comment on the matter.

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The liquidation process is the end of a startup that has imploded and been battling for survival for months. This has sent shock waves through Southeast Asia and India's tech industries. The company was once high-flying but pitched into a downward spiral after complaints of financial irregularities. This culminated in the dismissal of high-profile co-founder and Chief Executive Officer Ankiti Bose, 31, in May.

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Bose has continued to deny any claims of wrongdoing throughout the crisis and argues she is being unfairly targeted. As the clash between Bose and the board escalates, she has hired an attorney to fight back against what she describes as a “witch hunt.” Bose argues that she is getting blamed for decisions and practices that were well known by senior managers and directors.

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After Zilingo's creditors Varde Partners and Indies Capital Partners found a buyer for some of its assets, the assets have been transferred to the new owner for an undisclosed purchase price, according to sources.

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Zilingo was one of the most successful startups to come out of Singapore. However, its recent problems have caused major investor Temasek Holdings to express concern. Sequoia Capital India, another prominent investor, has urged the company to take action to fix the situation.

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The company's downfall can be traced back to the strained relationship between Bose, a celebrity CEO who was always on the go, and her longtime supporter Shailendra Singh, head of Sequoia India. The two used to be allies, but they fell out as financial pressures mounted. Singh lost faith in Bose's management skills, while Bose felt that Singh betrayed her by pushing her out of her own company.

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Zilingo, an e-commerce platform that was once valued at $1 billion, has fallen on hard times. In a recent article, Forbes detailed the company's struggles, which include a failed expansion into Southeast Asia, mounting debt, and a string of executive departures. Zilingo's story is a cautionary tale for other startups that are trying to scale quickly and achieve unicorn status.

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Zilingo was valued at close to $1 billion in a 2019 funding round. However, the Covid-19 pandemic has taken a toll on its business, and the company has been forced to cut jobs as revenue has dwindled. Ramesh Bafna, the former CFO of fashion e-commerce platform Myntra, left last May, just two months after joining the startup. Aadi Vaidya, the Chief Operating Officer, soon followed suit.

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In June, the board of directors at Zilingo began exploring options for the future of the company, including liquidation and a management buyout. This was first reported by Bloomberg News at the time, who also noted that financial adviser Deloitte LLP had been brought in to give a presentation on selling off the company's assets. Dhruv Kapoor, who co-founded Zilingo with Bose in 2015, made the pitch for a buyout during this process.

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Zilingo has downsized significantly in recent months, with fewer than 100 staff remaining in India, Indonesia, Sri Lanka and Bangladesh. This is a major change from just a few months ago, when the company was operating in at least eight countries with hundreds of workers. The downsizing is likely due to the current global crisis.