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The collapse of renowned fashion startup Zilingo Pte initially appeared startlingly abrupt.
It was March when the popular Singaporean IT company fired its 30-year-old CEO Ankiti Bose over allegations of alleged financial irregularities. Within a few weeks, lenders were calling back loans, more than 100 employees had quit, and Bose found herself fired—despite the fact that she insists she did nothing wrong. The future of the business is now in doubt.
The Zilingo collapse has shook the tech sector in Southeast Asia and elsewhere. The startup had secured more than $300 million from some of the most well-known investors in the area, including Temasek Holdings Pte and Sequoia Capital India, the local division of the Silicon Valley company that had backed Apple Inc. and Google. Bose was a famous speaker who travelled the world, from California to Hong Kong, to address tech conferences.
According to interviews with more than 60 people, including current and former employees, business owners, investors, and friends of the major figures, Zilingo suffered under Bose’s direction for many years. Employees who worked for Bose claim that her management approach alienated them and damaged the company. The business switched between different sales strategies, including a $1 million promotional trip to Morocco, client loans, and a brief foray into the US. According to two former employees with firsthand knowledge of the situation, she at one time developed a fixation on “crazy growth” in an effort to attract Masayoshi Son, the powerful Japanese software entrepreneur.
The strained relationship between Bose and her steadfast ally, Shailendra Singh, CEO of Sequoia India, is at the root of the company’s demise. They were once allies but broke apart as financial pressure increased. According to persons familiar with their relationship who asked to remain anonymous because the discussions were private, Singh lost faith in the managerial abilities of the young founder he had supported, while Bose thought Singh had betrayed her by forcing her out of her own company. According to the sources, the dispute got so heated that Sequoia’s attorneys demanded Bose stop making accusations that would damage the company’s reputation in a legal notice they sent out in May.
The controversy surrounding Zilingo sheds light on a culture of internal corporate governance that appears to be loose and is typical in the startup sector. The business neglected to submit annual financial statements for two years, which is a requirement for all companies of its size in Singapore. Zilingo’s FY20 figures have not yet received approval from auditor KPMG LLP. While it is common for companies to violate these deadlines, which can result in fines of up to S$600 ($430), it is usually a red flag that the board may need to take more drastic measures.
Yet at the end of 2020, investors increased their investments in Zilingo, including state-owned companies Temasek and EDBI. The majority of the company’s shareholders only formally took action against Bose after whistleblower concerns were made earlier this year.
