How small businesses in Singapore are especially at risk of being impacted by this financial crisis

Compared to banks, alternative financing platforms have less dry powder to pass around. But they have the flexibility to tweak their credit criteria or issue loans to sectors deemed too risky for banks. With these risks, SMEs must contend with higher interest rates, but it’s still a lifeline when they need it most.

Barriers that prevent small businesses from accessing alternative lending

Funding Societies sees its efforts as complementing government measures, which may not be enough for SMEs. The platform is helping to provide “deserving SMEs with short-term bridging loans to tide over the short-term cash-flow concerns,” said Jain.

Unlike banks, alternative financiers offer short-tenure loans and invoice financing to all SMEs. They can help SMEs tide over short-term cash-flow concerns. June Tang, director of honey wholesaler Xali Pte Ltd, said she uses banks for import financing but turned to Finaxar for invoice financing.

The pandemic looks set to be an inflection point for the alternative financing sector. There is a fast-growing mismatch between supply and demand. With the economic downturn, there is more demand for working capital due to increased liquidity challenges. This also means lenders’ risk appetites are declining, resulting in less funding available for SMEs.

Companies like Validus are poised to capitalise on this situation. The institutional lenders and high net-worth individuals that lend on its platform are looking to target SMEs, seeing them as opportunities to diversify from volatile markets.

Validus, however, is still likely to be affected by the liquidity crunch to some extent. Investors who might lend through its platform are smarting from losses in the stock markets. Finaxar, on the other hand, is more insulated from this since it co-funds loans with development funds. It is essentially tapping on funds that are already available just for this purpose. And as businesses look to keep the lights on, options like Finaxar, Validus, and the like are more likely to be considered than ever.

Managing risks

Managing risks

Even as the SME lending opportunity looms large for the alternative lending companies, though, risk looms larger.

Lending in a downturn has obvious risks. With companies in sectors such as oil and gas turning insolvent, banks are increasingly seeing their non-performing loans (NPL) rate rise. SMEs, which are looking for cash loans rather than invoice or contract financing at the moment, are likely to further contribute to this.

At the beginning of the year, there were more contract and invoice financing requests, said Funding Societies’ Jain. But March and April saw a significant reduction, with Covid-19 disrupting trading activity.

Banks are already steeling their books for NPL increases caused by Covid-19 by increasing their general reserve to absorb credit losses. MAS has also adjusted regulatory requirements, such as tweaking banks’ capital and liquidity requirements to sustain lending.

Alternative lending platforms have also tightened their lending criteria during this period. Funding Societies said its NPL percentage has only gone up marginally; its default rate currently stands at 1.3%. It expects a marginal increase in defaults in the near-term as a majority of the loans it gives out are of short tenure. “We have and will continue to provide restructuring options to qualified SMEs as a means to assist them during this trying time,” said Jain.

The Complete Guide to The Covid Wedge for Alibaba’s Motivation in Southeast Asia

Targeted at larger enterprise customers, Lark offers unlimited video calls for up to 100 people, 200GB of cloud storage, synchronised calendars and company-wide chat, all in one app. Still, a spokesperson said it is seeing increased adoption among SMEs, startups and educational organisations.

“We offer the full version of our service for free so customers can start this digitisation process,” Joey Lim, Lark’s commercial lead for the Asia-Pacific region, told us in an interview. “Most business technology is built for large organisations which have the resources. The smaller enterprises are those who suffer, yet they need to communicate and collaborate.”

Background information and what is covid

But Lark does make money, with enterprise customers paying for additional services such as cloud storage. And it is actively cashing in on that opportunity in Southeast Asia. Lim, who joined after a decade of sales roles with US enterprise software giants ServiceNow and Salesforce, leads a growing Singapore-based sales team that also works with resellers. It touts 6,000 customers, including ad firm dentsu X in Singapore and Indonesia-based IT provider Weefer.

ByteDance and Alibaba see the current situation as a wedge to access Southeast Asia, but adoption remains a tall order. While the region’s digital economy is forecast to boom to US$300 billion in 2025 from US$100 billion in 2019, SMEs have been slow on the digital uptake. We recently wrote about how Singapore, arguably the region’s most tech-forward economy, has fought a years-long battle to get SMEs to digitise.

The Chinese giants will also have to face off against incumbents like Slack, Google’s corporate services, and Microsoft Teams. Zoom, the US-based video conferencing service, has shown new entrants can win market share. It grew from 10 million daily meeting participants in December 2019 to 300 million as of April 2020. Zoom, though, is a nine-year-old business and success didn’t happen overnight.

Western leaders

Western leaders

Microsoft Teams Southeast Asia downloads in April 2020 (according to Apptopia)
Google Docs Southeast Asia downloads in April 2020 (according to Apptopia)
There is promise. Downloads of Lark across Southeast Asia surged from nearly nothing at the start of 2020—just 22 per day on 1 January—to over 5,500 daily at the end of April, according to data from app analytics firm Apptopia. DingTalk and DingTalk Lite downloads doubled to over 3,000 daily by early April. But building on that surge—which saw both outpace Slack—is a tough task.

Standing out

Realising what they are up against, the Chinese duo are leaving no stone unturned to become the de facto productivity apps in the region. “US services are often take-it-or-leave-it in terms of product, but Chinese companies will always do more,” a former ByteDance employee told us.

Take Lark, for instance. While it began as an internal ByteDance tool before being spun out in September 2019, it rivals most competitors by offering cloud documents, internal communications, and video calling. Apart from slotting multiple features into its product, it has also worked to integrate thousands of other tools that companies may find utility in.

How Indonesians Sell Produce Online

For the switch to B2C, Tanihub had to quickly restructure its warehouses. The frequently ordered items needed to be placed so that pickers can reach them immediately. Tanihub has six warehouses in several cities and they were initially laid out to handle some 100-150 bulk orders a day, which can take a longer time to pack. Now, they were peaking at 2,000 to 3,000 of individual orders a day.

By buying directly from farmers and introducing a higher level of transparency into the system, Tanihub can keep prices more stable.

Right now, it sells 5kg of medium-grade rice for IDR 57,000 (US$3.8)— IDR 11,400 (US$0.76) per kg—on its platform, with free shipping for orders above IDR 100,000 (US$6.70). The market price in Jakarta for the same grade is currently at IDR 13,900 (US$0.93) per kg.

Adapting to circumstance

Adapting to circumstance

Some innovations Tanihub has introduced in its supply chain have helped it get there:

Farmers like to work with Tanihub because it’s one destination that buys the whole range of products—from grade A to F—from them at a fair price. Indonesian farmers don’t use the best seeds and don’t have the best fertilisers or techniques, according to Wineka. This results in varying quality: some apples may have a different colour; the skin of an avocado could have a mark; an egg might not be the right size. In the conventional system, a buyer would give the farmer a fixed, usually low, price for the entire harvest, no matter what quality. Tanihub sorts the harvest by grade and pays the farmer accordingly. A Grade-A apple fetches more, but Tanihub also buys the lesser apples and sells those to food processing companies.
Like Sayurbox, Tanihub also organises its own logistics because it’s more reliable and provides transparency in the whole chain. Tanihub has six warehouses near the cities it services, and several packing facilities near its farms. Farmers let Tanihub know a few days ahead of the harvest how much to expect; and Tanihub informs them when there’s a demand surge or lull for certain products from its clients.

A lasting change

Venture-capital backing also means startups like Tanihub and Sayurbox can afford to resist the heavy price fluctuations, while simultaneously offering farmers and customers a better deal.

“For some commodities where Sayurbox has secured good supply sources, they are able to pay farmers higher prices and sell at a slightly lower price than comparable modern markets, and make better margins too,” says an early investor in the firm who asked to remain anonymous.

Profitability, however, will only come at scale, the investor adds. Which is why harnessing the Covid-19 opportunity just right is so important for these companies. Never have the costs of customer acquisition been this low.

Tanihub secured US$17 million in venture capital amid the pandemic. Sayurbox hasn’t disclosed funding, but it’s reportedly backed by Indonesia’s largest e-commerce platform, Tokopedia.

Both companies are experimenting to reach new buyers. Tanihub is learning to harness the B2C space, while Sayurbox is currently trying to capture resellers. The latter is offering a model in which one person can buy in bulk to supply to a group of people in a neighbourhood.

Indonesia’s new market disruptor for getting unglamorous produce to urbanites

“Earlier in the year, the Ministry of Agriculture assured there’s enough supply of rice and other staples to last through August, but in the last few days the President warned that provinces are seeing deficits.”


The price rollercoaster started around January and February. The skyrocketing garlic price, for example, was because there were delays in shipments from China, from where the bulk of the import comes. Indonesia imports 95% of its garlic, which doesn’t grow well in tropical climates.

Even domestic products are impacted, although to a lesser degree. The average price of rice across Indonesia during the first week of April rose to IDR 11,900 (US$0.79) per kg, a 1.28% increase from December 2019, according to research by the Centre for Indonesian Policy Studies (CIPS).

In provinces that have imposed partial lockdowns, which includes Jakarta, rice prices are even higher—averaging IDR 13,500 (US$0.90) per kg in traditional markets.

The problem isn’t bad harvests—they were good and are expected to remain reasonably good this year, says Felippa Amanta, a food security expert at CIPS. It’s an accumulation of little things. The pandemic is throwing more sand into the already creaky machinery of food distribution.

There are fewer people working in facilities like storages or slaughterhouses; there are fewer surveyors inspecting goods arriving at the ports, which causes jams and delays.

In theory, food distribution should go ahead without disruption, says Amanta, because it is exempt of all work and travel restrictions. However, regional travel restrictions do make logistics unpredictable. Some cities introduced curfews, which means trucks have to wait overnight before they can offload.

“We don’t have figures, just anecdotes,” says Amanta. “We’re hearing that truck drivers are simply afraid of going around, and some local communities aren’t allowing food distribution coming into the region because they are afraid.”

This has meant there are also fewer trucks on the road than before the pandemic.

Closer to the source

Sayurbox hasn’t faced these logistical challenges, says Hernis. Its trucks are registered with authorities and drivers carry documentation as proof that they’re transporting food.

Agritech startups like Sayurbox attempt to reduce some of the friction in the supply chain by building relationships with farmers and linking them directly with the end-buyer. In Sayurbox’s case, these are individual customers in the Greater Jakarta area. The startup chose to focus on this demographic first.

Five-year-old Tanihub, another agritech company from a similar cohort, chose to focus on enterprise clients: food processing firms, resellers, hotels, and caterers. The company is present in several cities.

Tanihub’s model was initially more adapted to bulk orders, says Pamitra Wineka, its president and co-founder. But the startup was affected by the pandemic. After movement restrictions set in, its B2B arm saw less and less activity because businesses, especially in the hotel and restaurant sector, were winding down. Tanihub’s B2C arm simultaneously saw more demand.

B2C was never Tanihub’s strength, says Wineka. The firm introduced it mostly for branding, so that there’d be a reason for people to know Tanihub.

The problem with their domestic food supply chain is providing varied produce at competitive prices to out-of-reach markets

By mid-March, however, as more and more people in the Greater Jakarta area self-isolated at home, Sayurbox suddenly got more than 5X the usual number of orders. Fruits and vegetables were piling up at its Jakarta warehouse. Delivering the last of the day’s boxes would take till well after 10PM. Sayurbox was struggling to keep up.

On 2 April, it capitulated: “Sayurbox will rest for a moment and prepare a better service for you,” the company announced to its customers. The team desperately needed to clear the backlog and streamline operations so that it could tackle the 5X-higher order volumes without delays.

Indonesia’s Food Problem of Varying

Indonesia's Food Problem of Varying

In the few days after Sayurbox’s customer-facing app hit the pause button, work behind the scenes was frantic, says Oshin Hernis, the startup’s head of communications. Sayurbox opened and stocked a second warehouse, hired and trained 25 new people. By 10 April, it was ready to resume orders. Luck was on its side: the rapid scale-up was possible because Sayurbox was already eyeing a location for its second warehouse before the pandemic. Covid-19 just accelerated that process, says Hernis.

The behavioural shifts created by the crisis could be a catalyst that accelerates the adoption of online grocery services in Indonesia. With roughly 30% of Indonesia’s population working in agriculture—the vast majority in small, family-operated farms—an overhaul has been long due for the sector.

A farmer’s produce can go through up to eight or nine different intermediaries before it reaches the market. Farmers get paid little, while the end-price for customers can be high. The supply chain puzzle also means prices can fluctuate wildly. For example, the price of garlic increased by 35.6% to IDR 43,200 (US$2.9) per kg between December and mid-April.

If there’s anything positive to come out of this crisis, it’s that Indonesia has been forced to pay close attention to its inefficient food distribution system. Agritech startups like Sayurbox and Tanihub, which help farmers sell produce directly to customers, can play their part in bringing innovation and efficiency to the system.

The price rollercoaster

Price fluctuations for basic commodities are common in Indonesia, even without a crisis. They’re a recurring theme around the Ramadan fasting month, when demand is high.

Indonesia relies on a mix of domestically produced commodities and imports to keep its people fed. The country is almost self-reliant in rice and poultry. Beef, salt, and sugar are a mix of local and imported. It heavily depends on imports for onions and garlic.

The complicated supply chain means there’s always a hiccup. Factors such as a bad harvest, an outdated licence, stalled negotiations over import quota, or an unexpected port closure, can lead to delays, distribution hang-ups and, eventually, shortages. Usually, the turbulence is temporary and prices go back to normal.

However, experts fear that the pandemic, which happened to peak just as Indonesia entered Ramadan season, could keep things out of whack for months to come. It can potentially cause serious problems if people can’t afford basic staple foods.


AI is Fueling a Big Change in Software Development

Commissions, though, make sense for Udaan. For an order of Rs 5 lakh (US$6,619), Udaan could pocket up to Rs 50,000 (US$661) simply to facilitate the transaction. This is apart from the flat fee it charges for logistics, interest on lending, and value-added services like banner ads. Amazon, for instance, charges a 16.5% commission in its business-to-consumer (B2C) mobile accessories category, though it should be noted that margins are higher in B2C.

The stages of a scaling sprint

The stages of a scaling sprint

The high commissions took a toll on Udaan’s retailers and suppliers, a former zonal manager in the clothing category said. Seller interest in the category dropped by almost half, the former manager added. In a Facebook group titled ‘All India Udaan Sellers’, several members stated that the commission was not brought up with them beforehand.

In an earlier story on Udaan, We spoke to a seller who was charged a 6% commission by the company. He said he planned to mark up his products by 6% to make up for this. That is precisely what has happened as Udaan rolled commissions out across its platform—sellers passed the commission on to buyers. For buyers, it’s a double whammy, as they also pay the platform’s logistics fees.

Sharma, who has been on Udaan for two-and-a-half years, says he stopped buying mobile accessories after this change. “Sellers increased their rates to sell on Udaan. 80% of the retailers dropped out from the category after that. I can’t buy anymore, 10% is very high,” he says.

The commissions also led to an uneven marketplace, with each seller choosing to price the product differently. In other B2B firms like ShoeKonnect and Paytm’s* B2B arm, sellers must get their updated pricing approved by the platforms’ business development managers, a Delhi-based seller of Udaan said. Not so with Udaan. Not only can prices be changed on a daily basis by sellers, there is no minimum order mandated on the platform.

The logic of logistics

Udaan’s other great monetisation hope was logistics. The company’s logistics arm, Udaan Express, delivers 60-70% of all orders across 800 cities, four former and current executives said. The remaining orders are outsourced to third-party logistics providers like Delhivery and Ecom Express.

The company also currently has 25-30 warehouses pan-India, three former and current employees said. Owning warehouses and handling inventory means that Udaan is further from Chinese B2B giant Alibaba, and closer to e-commerce leader Amazon. This isn’t great for profit margins, as evidenced by the fact that asset-light Alibaba has higher profit margins than Amazon. In fact, for the year ended March 2019, expenditure on logistics and cash collection (for credit) was Udaan’s single-largest expense at Rs 254 crore (US$33.6 million).

Udaan, though, believes that owning a logistics play improves the experience it offers. Not only does it make for a smoother supply chain, it also allows for economies of scale thanks to warehouses as pickup is streamlined.

Udaan implemented a flat logistics fee for each category—around Rs 100 (US$1.3) for clothing and Rs 30 (US$0.40) for fresh produce, said one Delhi-based buyer.

The Definitive Guide to Udaan’s Current Situations and Strategies

The company hit the ground running, fuelling aggressive growth through aggressive losses. This was a strategy its founders Amod Malviya, Sujeet Kumar and Vaibhav Gupta picked up from their former employer, e-commerce giant Flipkart. Initially, it had no membership fees, no delivery charges, and no listing charges. When sellers were onboarded, the company didn’t seek to charge them until they’d transacted on the platform for a while. Unsurprisingly, this led to incredible growth and, with it, funding.

What are scaling sprints?

What are scaling sprints

Udaan made no money in its first year of operations. Fourteen months later, it became a unicorn—a startup with a valuation over US$1 billion—thanks to a US$225 million funding round led by DST Global and Lightspeed Venture Partners in September 2018. Just over a year later, it continued its fundraising hot streak with a US$585 million round in October 2019 to reach its current valuation of US$2.7 billion.

But while Udaan has scaled rapidly, sustainability is a whole other matter, according to several employees, buyers and sellers we spoke to. The company has struggled to monetise its services while simultaneously burning money to capture the market. Udaan had issues surrounding its commissions, high return rates, poor customer service and high credit defaults, several employees, sellers and buyers said.

Trustroot Internet, the company’s Singapore-based parent entity, saw its revenue from operations increase from Rs 3.24 crore (US$423,644) in the year ended March 2018 to Rs 46.36 crore (US$6.1 million) for the following year. Its total losses, though, widened from Rs 60.3 crore (~US$8 million) to Rs 779.5 crore (US$103.2 million) in the same period. Covid-19 was merely the sucker punch that ultimately staggered the B2B Goliath.

Monetisation moves

Udaan has been burning money rapidly to capture the B2B market—it had a monthly burn rate of US$15 million in 2019. But even the best-funded startups must monetise, and Udaan sought to do that by charging commissions on transactions via its platform.

In May 2019, Udaan introduced commissions between 8-10%, excluding GST, two buyers and sellers told us. Not only did this come out of the blue, they felt it was a particularly steep price to pay. In contrast, other B2B platforms like Amazon Business, ShoeKonnect, and AJIO Business charge commissions in the 2-3% range, Ramawathar Sharma, a mobile accessories retailer said.

For Udaan, it was a marked deviation from its original strategy. “We want to scale, not charge commissions,” Udaan’s co-founder Sujeet Kumar had assured a supplier at a buyer-seller event in Mumbai in September 2018, according to a video provided by a former employee. Kumar said if they charge commissions on each order, sellers will not be inclined to return again. The event was held to celebrate Udaan’s US$1 billion valuation that month.

Instead, Udaan’s stated intent was to make money from data-backed ads, the way Facebook and Google did, through financial services, and through logistics. “If we solve logistics at scale, look at any global company, like FedEx, they work at 10-15% profit after tax. Credit is not free, we charge that also. And when the platform scales, people will advertise,” Kumar, who headed logistics at Flipkart, said at the event.

How Deep Tech is Perceived in the Funding Space And What Kinds of Rewards it Gives Back to Investees

Vickers’ other exits include real estate investment firm Cambridge Industrial Trust, which went public in Singapore in 2005. It subsequently sold to a joint venture between the National Australia Bank and Oxley Capital in 2008. That sale saw Vickers make a 26X return with an internal rate of return (IRR) of about 190%.

But it was in 2009 that the firm began to morph into the deep-tech-focussed entity it is today. This happened after Tan realised the hard science knowhow abundant in his team. Out of a team of 23, eight have a doctorate in hard sciences. Tan himself has a bachelors, a masters of philosophy and a PhD in engineering—the latter two from the University of Cambridge.

Mediocre fund performance

Mediocre fund performance

Towards the end of March, a full-page story on Vickers’ US$200 million fundraise appeared in Singapore’s Business Times newspaper. Along with it, there was a table of its funds’ performance, taken from the firm’s website.

It is unusual for a global venture firm to display its fund multiples and IRR like this, says a venture funding consultant who asked not to be named. But while Vickers’ transparency could be applauded, the contents of the table didn’t make for particularly good reading.

Armed with this expertise, Tan realised Vickers was better than most at understanding whether a technology would work, as compared to evaluating consumer-focussed companies.

After Vickers’ pivot to deep tech, Tan realised that the firm’s projected returns moved from single-digit multiples to double-digits. “Our write-off rate used to be about 21% and now it’s about 9%,” he told us in an interview.

More IPOs

Vickers might also have another exit up its sleeve that could materialise by end of the year, says Tan. However, it is also dependent on public market sentiments as the unidentified company plans to go public in China.

While financial data platform Preqin declined to share specific fund performance details with us, others are decidedly unimpressed. The co-founder of a regional VC firm says that the performance of Vickers’ second and third funds was “horrible”.

The firm debuted with a US$9 million fund. According to investment data reviewed by us, the fund has a distribution to paid-in capital (DPI) of 214.6%. In other words, it returned 2.1X of the first fund to its limited partners over the fund’s 15-year existence.

Fund II, which was closed in 2006 at US$32.7 million, has only generated a DPI of 104.3% as of September 30, 2019. For Fund III, which was closed in 2009 at US$62.5 million, the DPI was 16.9%.

“For a fund that is 11 years old, it should’ve been shut down and be done with already because a normal fund life is about 10 years,” says a regional venture capitalist who requested anonymity because he didn’t want to discuss a fellow investor publicly. “Second, this fund has only returned 16.9% of money to LPs—that’s quite a disaster.”

Their success depends too much on funding and not enough on self-generated cash flow

Narayanan declined to comment when approached for this story. A Zilingo spokesperson said the nCinga team now manages Zilingo’s Saas business.

Like other Zilingo strategies, a core issue was inconsistent decision making. Despite significant hiring, many of the key leadership came from consulting or finance backgrounds and were early in their careers, the former employees said. High management churn in the US, too, made Zilingo prone to changing course, which was exacerbated by a disconnect between management and staff, another person said.

With a refocus on Southeast Asia, many of the octopus tentacles will be severed. But that may not be a bad thing in the short time, some company insiders believe.



B2B fashion sourcing for SMEs, small brands and manufacturers accounts for around 95% of Zilingo’s revenue, according to a senior executive at the startup. We previously reported that Zilingo’s take-home revenue is around $200 million per year.

One of the former employees, who was involved in the US operations, told us that building out Zilingo’s base could give it a foundation for a renewed pitch to brands and influencers, starting in Southeast Asia. “Combining technology and the B2B supply chain is still a billion-dollar idea,” they said.

Investors, too, have pared down expectations in the short term.

“The main focus now is B2B sourcing,” a Zilingo investor told us anonymously as they are not permitted to speak to the media. “It is still very valid and what we are excited about.”

The investor said the closure of retail stores, supply chain uncertainties and more still give Zilingo a chance to make “significant impact.” But they did concede that the business will be less aggressive with its private label product and fintech services. Zilingo’s loan business, for example, has been frozen given the impact the Covid-19 outbreak has had on SMEs (small and medium enterprises) and small seller cash flow.

Zilingo is also attempting a Covid-suited strategy. One global brands such as Gucci, Armani and Bulgari have tried—by switching their production output to masks and equipment in response to a shortfall in protective gear for healthcare workers. Zilingo is using its manufacturing connections to build a capacity of “up to one million units per day of near-ready stocks of N95 and surgical masks and gowns,” according to a LinkedIn post from Bose. The difference is that it doesn’t directly own the supply; there is plenty of competition in this market and Covid-19 lockdowns make logistics a challenge.

Cleaning up

Half of Zilingo’s manufacturing partners are currently lying idle due to the impact of the coronavirus. The company hopes to encourage them to manufacture PPE and products like perfumed sanitisers.

A sales sheet obtained by us shows the company is offering products that include FDA-certified masks from around US$0.10 per piece, gloves from US$0.46 per piece and protective suits from US$10.64. One businessman selling masks from China called the project “ballsy” given the price volatility. They requested anonymity because they did not want to be seen discussing a competitor in the media.

The issue underscores a broader problem facing Indian start-ups that rush to scale before finding a sound business model

Zilingo does e-commerce and it does not specialise in garment making or design,” they said. “The sellers have the product and they go to the website to sell, but that doesn’t give Zilingo a fashion industry core.”

Having spent heavily on sales and two offices, management balked at the lack of revenue and refocused on sourcing for fashion brands in late 2019. But it didn’t serve to improve Zilingo’s “core”.

“We didn’t hire specialists, which is essential in fashion where you have different strategies for sports or casual wear. You really need to specialise,” another ex-employee said of its failure to hire local industry personnel to front the US push.

Covid conundrum

Covid conundrum

It’s almost like Zilingo wasn’t steadfastly focused on fashion alone. It had a lot going on.

CEO Ankiti Bose often refers to the business as an octopus. with its tentacles dipping into many businesses. Zilingo wanted to do many things beyond simply selling fast fashion to consumers, and it was that octopus-like ambition that signaled its expansion into the US and Australia.

Narayanan declined to comment when approached for this story. A Zilingo spokesperson said the nCinga team now manages Zilingo’s Saas business.

Like other Zilingo strategies, a core issue was inconsistent decision making. Despite significant hiring, many of the key leadership came from consulting or finance backgrounds and were early in their careers, the former employees said. High management churn in the US, too, made Zilingo prone to changing course, which was exacerbated by a disconnect between management and staff, another person said.

High profile

At 28 years old, Zilingo CEO Ankiti Bose is the most visible female startup founder in Southeast Asia—she was dubbed “Southeast Asia’s tech sensation” by Bloomberg. She founded Zilingo after a visit to Bangkok inspired the idea to bring Asia’s street fashion vendors online. She maintains close links to Zilingo investor Sequoia, having started her career as an analyst with the firm’s India office.

The octopus strategy—which ran from financial services like working capital for fashion sellers to more outlier proposals such as ethical fashion sourcing using RFID and blockchain technology—proved more challenging to execute. The former employees suggested that fewer ideas with more focus would have been easier to manage.

One such example is Zilingo’s desire to be a digital version of Li & Fung, a 113-year old Hong Kong company that manages sourcing and supply chain for fashion brands in the US and Europe—including Walmart and Kate Spade & Company.

In December 2019, as part of that push, Zilingo spent US$15.5 million to buy Sri Lanka-based nCinga, a software business that digitises manufacturing companies which counted Zilingo as a customer. The deal—Zilingo’s first acquisition—would enable it to bring technology to manufacturers and, in doing so, connect them to its global supply and potential customers like REVOLVE or celebrities from CAA.

However, the status of Zilingo’s nCinga-fronted digitisation is uncertain. Sid Narayanan, Zilingo’s head of Saas products and the executive who led the acquisition deal, left Zilingo during the restructuring. A prominent venture capitalist told us that Narayanan has started his own company.