Reaching unicorn status (i.e. US$1 billion valuation) is a milestone that few startups will reach. For Zilingo, it was a case of so near, yet so far. The technology and commerce fashion startup was valued at US$970 million during their last fund-raising of US$226 million in 2019. However, the recent implosion of the company, as uncovered by Bloomberg, tells a different story of its rapid growth.
Here’s what businesses can learn from the Zilingo saga.
The Good: Age And Sex Should Not Limit Entrepreneurship
Zilingo co-founders, Ankiti Bose and Dhruv Kapoor co-founded Zilingo at age 23 and 24 respectively. At this tender age, most of us would have just graduated from school and figuring out our first steps in our careers. Yet, age did not stop Bose, an analyst at venture capital firm Sequoia India, and Kapoor, a software engineer at gaming studio Kiwi Inc., from their ambitions to build their own startups.
Additionally, Bose was not only a young 23-year-old but also one of the rare few female entrepreneurs in a country that has a small ratio of females in corporate leadership roles. Instead of letting that hold her back, she stepped up to the limelight and fronted Zilingo as its Chief Executive Officer (CEO).
Read Also: Is The Gender Pay Gap Real In Singapore?
The Good: A Good Business Solves Problems Or Serves To Fill Gaps In The Market
Bose was inspired with her business idea during her travel to Thailand’s Chatuchak market where she noticed the fashion sellers didn’t know how to sell their products online. From there, the seed of Zilingo was born: to connect businesses across the entire supply chain and empowers them with everything they need to run a business.
They spent time with merchants to understand their pain points better. When everyone was solving for access to internet, Zilingo took a different path to solve the gaps that happens before the product gets sold. This included the basics like inventory management and sales tracking, to deeper services like financing, sourcing and procurement, and identification of upcoming fashion trends.
The Bad: Not Having Proper Bookkeeping Or Auditing Financial Records
However, one major misstep on Zilingo’s part is the lack of proper bookkeeping. Zilingo had not filed financial statements since 2019. Additionally, Auditor KPMG LLP had yet to sign off on Zilingo’s FY20 results.
In Singapore, private limited companies are subject to corporate governance and compliance rules including the need to appoint a qualified company secretary, appoint at least 1 Singapore resident as a company director, and to file annual returns and minutes of Annual General Meetings. Companies are also required to retain documents of financial transactions for at least the past 5 years.
While the penalty for missing these deadlines is not punitive (a fine of up to $600 is imposed), it is typically a warning sign of lax internal corporate governance culture.
Read Also: How To Choose The Right Legal Entity To Start A Business In Singapore
The Ugly: The Suspension, Firing and Resignation Of Key Leadership
In March 2022, Zilingo suspended Bose, the CEO, due to complaints over alleged financial irregularities. Bose was later fired in May 2022. Chief Financial Officer, Ramesh Bafna, also left in May. Most recently, Chief Operating Officer, Aadi Vaidya, confirmed his resignation.
The departure of key leadership paints an ugly story of Zilingo’s struggles, a stark contrast from its peak. While investigations were underway regarding the company’s financials, Zilingo is also embroiled in internal turmoil as they have reportedly laid off their entire Philippines team and the board considers liquidation.
Lessons To Be Learnt
Allegedly, Bose’s management style alienated employees and she chased crazy growth instead of sustainable development of the company. The falling out between co-founders, stakeholders and investors also proved to be dramatic when the company took a turn for the worse. While these aren’t the worse sins of startup culture, the lack of internal corporate governance may prove to be the nail on the coffin for Zilingo.
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