Zilingo co-founders offer to buy financially troubled startup


Zilingo co-founders – Dhruv Kapoor and Ankiti Bose – have offered to buy the struggling fashion startup as the duo aim to restructure and revive the company’s operations amid liquidation.

“Given the potential of the business and the value you know this business can achieve, I urge you to consider a management buyout as a preferred alternative to voluntary liquidation,” Kapoor said in the proposal sent to the Zilingo Board of Directors on Sunday evening. A copy of the proposal was obtained by UKTN Asia.

Bose – whom the board fired as CEO in May following an internal accounting investigation – has thrown its support behind the MBO [management buyout] proposed by Kapoor. “I approve of this proposed MBO plan with this [new] group of investors and encourage all Zilingo shareholders to see beyond personal differences here and do what’s right,” Bose told the board via email shortly after Kapoor sent the proposal. “I would like to encourage all interested parties to engage alongside management and the founding group with the new group of investors to support this initiative.”

As part of the preliminary, non-binding offer, Kapoor said the co-founders and an unidentified new group of investors will form a new company to take over Zilingo’s assets, including the factory, supply business and the Z Connect, Z Trade and Z Spotlight digital platforms, while the rest of the company’s assets will be liquidated. The liquidation proceeds will be used to repay approximately $40 million in debt to Zorro Assets over 36 months.

As part of the deal, Zilingo will also receive a new capital injection of $8 million from the new group of investors, which is also open to existing shareholders subscribing for capital in the new company. The startup was founded by Bose and Kapoor (who are both alumni of UKTN Asia‘s 30 Under 30, and each owns 7.9% of the company) in 2015. And it now counts Singaporean public investment firm Temasek Holdings and Sequoia Capital among its biggest investors.

At its peak, Zilingo, a digital platform that helps fashion merchants sell their wares to consumers across Southeast Asia, was valued at $970 million in 2019. The company was looking to raise up to to $200 million in February when allegations of wrongdoing emerged the following month, sparking an investigation that led to Bose’s dismissal.

“As founders, it is our ultimate responsibility to make sure we do whatever it takes to keep the lights on in Zilingo and in the homes of the hundreds of people who are part of it,” Bose said in a statement to UKTN Asia. “Whatever our differences, at the end of the day, we started this business with the same goal. Today, we have come together to fight for that same goal.”



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