With Series C round, Southeast Asia-based fashion startup Zilingo continues to bet on Indian technology
Zilingo, the Southeast Asian marketplace, has raised $54 million Series C funding. The additional funds will be used to boost business and expand into other markets to help Zilingo grow as a market leader.
Southeast Asia’s ecommerce marketplace Zilingo has raised $54 million Series C funding. The round was led by Sofina, Burda Principal Investments, and Sequoia Capital while Amadeus Capital joined in as a new investor. Existing investors Tim Draper, Venturra, Beenext, SIG, and Manik Arora also participated in this round of funding. Five months ago, Zilingo had raised $17 million Series B funding.
The fresh infusion of capital will be used to focus and boost the Indonesia business, foray into other markets, and cross-border businesses. The plan is also to further expand the supply base across Cambodia and Bangladesh in addition to ASEAN markets.
“At the same time, we’re working on some really exciting product features, and some new initiatives. There’s tons of stuff on fashion discovery, recommendations, seller analytics, and much more that’s under way, and we’re running new experiments all the time. We’re also seeing the Zilingo platform grow in many new ways, often organically, on seller, shipment, payments, finance and more,” says Ankiti Bose, Co-founder and CEO, Zilingo.
The early days
Zilingo was founded by Ankiti Bose and Dhruv Kapoor in October 2015. Ankiti was travelling across Thailand and Indonesia when she noticed that the several small and medium-sized enterprises in the region had possibly the best things to offer.
But she also noticed that despite being huge markets, where people even from other parts of Southeast Asia shopped, these stores barely had any access to digital platforms apart from Facebook, and couldn’t market themselves online effectively .
This led to the birth of Zilingo, a fashion and lifestyle marketplace built for the Southeast Asian market. Ankiti says,
“Nowhere in the world has a horizontal ecommerce company also cracked fashion. It’s a unique, high margin category which is highly dependent on fast-moving cycles and has its own nuances. Unlike buying detergent or electronics, fashion is much more about your choice, individuality, and trends. It requires a different approach than the rest of ecommerce.”
When YourStory first spoke to Zilingo in 2015, it had 1,500 merchants in Thailand and Singapore primarily focussed on selling clothes, accessories, bags, shoes, and beauty products. Now they have over 10,000 merchants across different parts of Asia.
Ankiti says Zilingo has grown 10x by revenues, launched a TV campaign in Indonesia, and expanded the merchant ecosystem to include an arsenal of services, making it a one-of-a-kind product for over 10,000 merchants and private labels across Asia.
The team charges sellers a commission of 10-15 percent on each successful transaction. Zilingo also offers sellers features like payments, marketing, order management, inventory, cataloging, and pricing — complete with analytics and intelligence - free of charge. They are, however, charged for per-order fulfilment. The average order size has gone up from $40 to $60.
Building the technology
However, building it to this scale had its challenges. Dhruv, Co-founder and CTO adds that the first launch of the core backend infrastructure, and first seller and buyer apps took around three months. While the platform is headquartered in Indonesia, the core technology is driven in Bengaluru.
“It was really hectic, but lots of fun, and the team really came together back then. During those initial months, we figured out that given our outsized ambition, we’d keep wanting to add more intelligence, automation, and data on all fronts, and therefore architectured the core infrastructure as a set of microservices. This proved immensely beneficial for us as we started scaling.”
Dhruv adds that they are now a marketplace with buyers in three countries and sellers in six, speaking many different languages, selling across borders, and also in bulk. “Logistics and payment systems integrate with around 20 different partners for seamless shipment and checkout in our three buyer markets. We’re a team of just over 35 developers, product folks, and designers, and we also are hiring," he says.
The collaboration between Southeast Asia and India isn’t difficult. At Zilingo, technology and product teams interface with business teams directly and spend sufficient time in the markets.
According to Dhruv, this tends to work well, because they have ownership of their products or services, and also the ability to take key decisions along with business.
“Product and tech folks travel quite a bit to our offices in Jakarta, Bangkok, Hong Kong and Singapore, both for face time and to learn more about the market first hand. What also helps, besides the travel and ownership, is that we keep launching and iterating fast,” Dhruv says .
Collaboration is the key
The team had realised early on that the scale the platform was looking for would mean that they have to get really good at architecturing complex, distributed systems. The team began with building a fair bit of good technology for this (and often on the shoulders of great open source projects).
“We turned these solutions into internal libraries and that dramatically made development faster. At the same time, we had to have highly automated dev ops from day one, and that was another key area of work,” Dhruv says.
The tech team works on Facebook-style continuous everyday launches. The developers ship products with automation and internal screens to control almost every aspect of what’s happening on the platform. For eg, the teams have internal screens to switch on and off payment methods or reconfigure shipment flows, and many data dashboards.
This allows developers to spend time working on new initiatives, iterating on product, and building core systems, and travel and have face time with business interests when starting on new things.
A lucrative market itself, Southeast Asia also presents competitors like Zalora. A large ecommerce fashion platform, Zalora claims to have had over 17 million monthly visits from across the ASEAN region as of end 2014, and had received funding of over $238 million. Last month, the Ayala group acquired 49 percent stake in Zalora.
Other players include Ava in the Philippines, Chon.vn in Vietnam, FatFish-backed Dressabelle, Jungle Ventures-backed Pomelo, YJ Capital-backed VIP Plaza, Blue Bird Group Owner Indra Djokosoetono-backed Maskoolin, 8Wood, and Cloth Inc.
A TechCrunch report states that in Thailand alone, the GMV (gross merchandise value) from sites like Facebook and Instagram for small businesses was $510 million. The report states this accounted for a third of the total ecommerce GMV of Thailand. Higher per capita income and a spurt in infrastructure in Southeast Asia over the last two years has boosted the space, Ankiti says.
Speaking of their continued investment in Zilingo Shailendra Singh, Managing Director, Sequoia (India) Singapore says:
“The Zilingo investment is special for Sequoia because our association started with a seed investment even before the Zilingo service was first launched. Ankiti and Dhruv have totally impressed us with the quality of team they have assembled, their innovative ecommerce strategy and playbook, and their speed and quality of execution, all of which resulted in more than 10x revenue growth in the last one year. This new round was finalised weeks after the last one and is a ringing endorsement of how much potential the investor group sees in the company. We’re glad to have invested significantly across all rounds the company has raised.”