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Zilingo co-founder and director Ankiti Bose has announced her resignation from the startup as well as its subsidiaries as the startup has been making the headlines for a while now.
Zilingo is a technology platform that empowers apparel supply chain players. It is a B2B tech platform founded by Ankiti Bose and Dhruv Kapoor in 2015 and is headquartered in Singapore. The platform aims at improving the global apparel supply chain as it assists companies to produce, source and trade more efficiently.
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The company enables the raw material providers, mills, manufacturers and everyone else in the supply chain to optimize their processes, improve cost efficiency and support sustainable growth. According to its website, the company makes sourcing 25% faster and 15% cheaper, reduces factory wastage by 50%, and has an annual sales volume exceeding $1 billion. Today the company has operations spanning India, Sri Lanka, Indonesia, Hong Kong, Thailand, Philippines, Australia, and the United States, connecting global brands with local suppliers.
But Zilingo, which was a rising star, was not without its own set of problems. Bose was reported to have enjoyed a flamboyant lifestyle at the expense of the company. The investors did not seem to mind since the business was running smoothly.
However, when two whistleblowers came forward to report financial irregularities and accused her of artificially inflating revenues, everything started going downhill. The company was reported to provide credit for inflated purchase orders as well.
This was in March as Bose was suspended as CEO. An investigation was opened into the accounts of the company to detect the alleged irregularities.
It was reported that the investigation by Kroll Inc. revealed mysterious and large payments, payments that were too large for a startup, that amounted to millions, which were signed off by Bose. These payments also included a payment of $7 million paid to a controversial law firm. However, Bose has maintained innocence and claimed all payments were legitimate and with proper documentation.
Following this revelation, Bose was fired as the CEO of the company in late May 2022. This investigation led to another issue as Sequoia, its earliest investor, and Koru wanted to liquidate the firm as the company's capability to operate was questioned. Several employees had left the company, including its CFO, along with ceasing several operations in Indonesia, its largest market.
Co-founder Dhruv Kapoor fought to save the company as creditors did not want the company to liquidate. The Board allowed a $40 million payment to creditors as this brought the company into a difficult financial position.
In a surprising turn of events, founder Dhruv Kapoor suggested a management buyout to the Board in late June 2022, which received the support of Bose. According to the deal, a PE investor would invest $8 million in a newly incorporated entity in tranches and all assets of the old entity will be liquidated in due course. The offer also froze all debts for three years, following repayment in four installments and a five-year business plan for the company.
This brings us to Ankiti Bose's announcement yesterday wherein she resigned from all directorship positions of the company and its subsidiaries. She still holds an 8.58% stake in the company so she may have some influence on the company and its future.
The company was all set to become a unicorn as it was planning to raise $150-200 million from Goldman Sachs in its next round of funding. Now, with investor trust shaken and a founder gone, it may be a dream which will never become reality.
Article by Aman Agarwal.
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