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February 24, 2019
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E-commerce startup Zilingo raises $226M to digitize Asia’s fashion supply chain

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If you’re looking for the next unicorn in Southeast Asia, Zilingo might just be it. The 3.5-year-old e-commerce company announced today that it has raised a Series D round worth $226 million to go after the opportunity to digitize Asia’s fashion supply chain.

This new round takes Zilingo to $308 million from investors since its 2015 launch. The Series D is provided by existing investors Sequoia India, Singapore sovereign fund Temasek, Germany’s Burda and Sofina, a European backer of Flipkart -owned fashion site Myntra. Joining the party for the first time is new investor EDBI, the corporate investment arm of Singapore’s Economic Development Board.

Zilingo isn’t commenting on a valuation for the round, but a source with knowledge of the deal told TechCrunch that it is ‘a rounding error’ away from $1 billion. We had heard in recent months that the startup was getting close to unicorn status, so that is likely to come sooner or later — particularly given that Zilingo has made it to Series D so rapidly.

Raising more than $300 million makes Zilingo one of Southeast Asia’s highest-capitalized startups, but its meteoric growth in the last year has come from expansion from consumer e-commerce into business-to-business services.

CEO Ankiti Bose — formerly with Sequoia India and McKinsey — and CTO Dhruv Kapoor first built a service that capitalized on Southeast Asia’s growing internet connectivity to bring small fashion vendors from the street markets of cities like Bangkok and Jakarta into the e-commerce fold.

Zilingo still operates its consumer-facing online retail store, but its key move has been to go after b2b opportunities in the supply chain. That’s to say that it is building a network of supply chain pieces — manufacturing, logistics, payments, etc — that it can take to retailers or brands. So, in theory, anyone wanting to get into private labels or fashion selling could use Zilingo as an end-to-end solution to make and source their product.

Revenue grew by 4X over the past year, with b2b responsible for 75 percent of that total, Bose told TechCrunch. She declined to provide raw figures but did say net income is in “the hundreds of millions” of U.S dollar. The company — which has over 400 staff — isn’t profitable yet, but CEO Bose said the b2b segment gives it “a clear pathway” to break-even by helping offset expensive e-commerce battles.

Ankiti Bose and Dhruv Kapoor founded Zilingo in 2015.

The supply chain’s ‘outdated tech’

Moving into the supply chain after building distribution makes sense, but Zilingo has long had its eye on services.

That business-focused push started with a suite of basic products to help Zilingo sellers manage their e-commerce business. Those initially included inventory management and sales tracking, but they have since graduated to deeper services like financing, sourcing and procurement, and a ‘style hunter’ for identifying upcoming fashion trends. Zilingo also widened its target from the long tail of small vendors operating in Southeast Asia, to bigger merchants and brands and even to the fashion industry in Europe, North America and beyond that seeks access to Asia’s producers, who are estimated to account for $1.4 trillion of the $3 billion global fashion manufacturing market.

Zilingo’s goal today is to provide any seller with the features, insight and network that brands such as Zara have built for themselves through years of work.

In Southeast Asia, that means helping small merchants, SMEs and larger retailers to source items for sale online through the Zilingo store. But in Europe and the U.S, where it doesn’t operate an outlet, Zilingo goes straight to the sellers themselves. That could mean retailers seeking wholesale opportunities from Asia or online influencers, such as Instagram personalities, keen to use their presence for e-commerce. Beyond just picking out items to sell, Zilingo wants to help them build their own private labels using its supply chain network.

That rest of the world plan has been on the cards since last year when Zilingo closed a $54 million Series C, but now the next stage of the journey is deeper integration with factories.

“If you think about these factories that make the products, the process isn’t optimized over there,” Bose said in an interview. “The guy or girl running factory likely has no technology, they don’t even use Excel. So we’re going to small and medium factories, increasing capacity utilization, helping to manage payroll, getting loans and other fintech services.”

Kapoor, her co-founder, adds that the fashion supply chain is “is marred by outdated tech.”

“It’s imperative for us to build products that introduce machine learning and data science effectively to SMEs while also being easy to use, get adopted and scale quickly. We’re re-wiring the entire supply chain with that lens so that we can add most value,” he added in a statement.

Zilingo encourages retailers and brands to develop their own private labels by tapping into the supply chain network it has built

AWS for the fashion supply chain

Bose said Zilingo’s early efforts have boosted factory efficiency by some 60 percent and made it possible to develop links to retailers while also enabling factories to develop their own private label colletions, rather than simply churning out unbranded or non-descript products.

A large part of that work with factories is consultancy-based, and Zilingo has hired supply chain experts to help provide quality guidance and perspective alongside the software tools it offers, Bose said.

She compares it, in many ways, to how Amazon conceived AWS. After it built tech to fix its own problems internally, it commercialized the services for third parties. So Zilingo started out offering a consumer-facing e-commerce platform but it is making its sourcing networks open to anyone at a cost — almost like supply chain on an API.

That gives its business a two, if not three, sided focus which spans selling to consumers in Southeast Asia through Zilingo.com — which is present in Thailand, Singapore, Malaysia and Indonesia with the Philippines and Australia coming soon — reaching overseas retailers through Zilingo Asia Mall, and developing the b2b play.

In Southeast Asia, its home market, Zilingo doesn’t pressure its merchants to sell on its platform exclusively — “we don’t mind if they go to Instagram, Lazada, Tokopedia and Shopee,” Bose said — but in the U.S. it doesn’t have a go-to consumer outlet. It’s possible that might change with the company considering potential partnerships, although it seems unlikely it will launch its own consumer play.

Zilingo was once destined to compete with the big players like Lazada, which is owned by Alibaba, Shopee, which is operated by NYSE-listed Sea, and Tokopedia, the $7 billion company that’s part of SoftBank’s Vision Fund, but its supply chain focus has shifted its position to that of enabler.

That’s helped it avoid tricky times for specialist e-commerce services, which battle tough competition, pricing wars and challenging dynamics, and instead become one of Southeast Asia’s highest-capitalized startups. The company’s U.S. plan is ambitious, and it is taking longer than expected to get off the ground, but that makes it a startup that is worth keeping an eye on in 2019. It’s also an example that the startup journey is not defined since, in some cases, the biggest opportunities aren’t presented immediately.

News Source = techcrunch.com

Warung Pintar raises $27.5M to digitize Indonesia’s street vendors

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The digital revolution in Indonesia, Southeast Asia’s largest economy, continues to attract big money from investors. Hot on the heels of a $50 million round for Bukalapak, a billion-dollar company helping street stall traders to tap the internet, so Warung Pintar, another startup helping digitize the country’s vendors, has pulled in $27.5 million for growth.

Bukalapak is one of Indonesia’s largest e-commerce services and it began catering to local merchants, those who sell product via road-side kiosks, last year, but eighteen-month-old Warung Pintar is focused exclusively on those vendors.

Bukalapak helps them to gain scale through online orders — it claims to have a base of 50 million registered users in Indonesia — but Warung Pintar digitizes kiosk vendors to the very core. At the most basic level, that means aesthetics; so all Warung Pintar vendors get a bright and colorfully-designed kiosk. They also get access to technology that includes a digital POS, free Wi-Fi for customers, an LCD screen for displays, power bank chargers and more.

It’s a ‘smart kiosk’ concept, essentially.

The project was founded in 2007 by East Ventures, a prolific early-stage investor that has backed unicorns like Tokopedia, Traveloka and Mercari. This new money means that Warung Pintar has now raised just over $35 million from investors to date.

The round — which is a Series B — included participation from existing backers SMDV, Vertex, Pavilion Capital, Line Ventures, Digital Garage, Agaeti, Triputra, Jerry Ng, and EV Growth — the joint fund from East Ventures and Yahoo. They were joined by OVO — a payment firm jointly owned by Indonesian mega-conglomerate Lippo — which has signed on as a new investor and is sure to be highly strategic in nature. OVO works with the likes of Grab, and it is battling to gain a foothold in Indonesia’s fledgling digital payments space, which is tipped to boom among the country’s 260 million population.

A Warung Pintar kiosk in Jakarta, Indonesia

These investors are all betting that Warung Pintar can take off and provide greater functionality for street vendors and consumers alike.

The startup is in growth mode right now so it isn’t fully focused on monetization. The only fee is $5,000 from the vendor, which covers the cost of a new prefab kiosk, while all the tech appliances are provided without fee to help kiosk owners engage with the local community. For example, East Ventures noticed that drivers for Go-Jek or Grab tended to hang around the kiosk store near the VC firm’s office and they were curious how to grow engagement to benefit both parties.

“There are going to be a lot of ways to charge and make money,” East Ventures co-founder and managing partner Willson Cuaca told TechCrunch in an interview. “Once we have built enough, we can manage the supply chain and then figure out of how to make money.”

Indeed, monetization might not be via fees to the kiosk owners themselves, explained Cuaca — who is president of Warung Pintar. Since the company maintains touch points with consumers, it is a commodity that can appeal to brands, manufacturers and others when it reaches nationwide scale.

While there has been promising progress and product market fit in Jakarta, Cuaca and his team see significant growth potential still to be realized.

When we spoke to Warung Pintar just under a year ago, it had just raised a seed round and had been in operation for under six months. Today, the business counts 1,150 kiosks in Jakarta. However, it recently opened up in Banyuwangi, East Java, which, alongside other planned expansions, is aimed to increase its reach to 5,000 kiosks before the end of this year, Cuaca said.

There’s no plan for regional expansion at this point, he added.

The business and model is fascinating but it is conceived and executed in Indonesia, that’s to say it isn’t a problem that could be identified, mapped and solved from the U.S, China or other markets. It’s the type of tech and startup that is helping change daily lives in Indonesia, the world’s fourth largest country by population. Home-grown solutions have been rare in Southeast Asia, but there are increasing opportunities that only local players can cater to and now the region’s VC corpus is substantial enough to provide the capital needed.

News Source = techcrunch.com

Indonesian e-commerce unicorn Bukalapak raises $50M

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The chances are you may be familiar with Tokopedia, especially after it commanded a $7 billion valuation last November when it raised $1.1 billion from investors like Alibaba and SoftBank’s Vision Fund, but fewer people outside of Indonesia are aware of another sizable local online retail unicorn: Bukalapak.

Smaller than Tokopedia in size, the company is valued at $1 billion — it became Indonesia’s fourth unicorn one year ago. The country, which is Southeast Asia’s largest economy and has a population of over 260 million, also counts Tokopedia, Go-Jek and Traveloka in the billion-dollar club.

Founded in 2010, Bukalapak claims an impressive two million orders per day and 50 million registered users. On the seller side, it said its core e-commerce business covers products from four million SMEs, 500,000 kiosk vendors and 700,000 ‘independent’ micro-businesses in Indonesia. Bukalapak means ‘open a stall’ in Indonesia’s Bahasa language, and anyone can open a shopfront on the platform.

This week, Bukalapak landed another notable funding milestone after it raised $50 million Series D round from the Mirae Asset-Naver Asia Growth Fund, a joint vehicle operated by Korean mutual fund Mirae Asset and Naver, the firm whose businesses include popular messaging service Line. This is the first time Bukalapak has disclosed the size of an investment in its business, although it did not give an updated valuation. The startup counts Alibaba’s Ant Financial, Indonesia telco Emtek, Sequoia India and Singaporean sovereign fund GIC among its existing backers.

Bukalapak is one of Indonesia’s leading online commerce platforms with four million registered users, a claimed two million daily transactions and a valuation of more than $1 billion

Bukalapak said it plans to use its new funds to grow opportunities for its SME retail partners and build out its tech platform, that’s likely to mean digital services such as insurance and a mobile wallet.

The company made a major push last year to partner with local ‘warung’ kiosk store retailers — who sell items much like street vendors — in a bit to differentiate itself from Tokopedia, which is much like Alibaba’s Taobao service for Indonesia, and develop an offering for consumers.

Beyond its e-commerce marketplace, Bukalapak also offers streaming and fintech products.

News Source = techcrunch.com

Sequoia wraps up new $695M fund for India and Southeast Asia

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Sequoia has announced the close of its newest fund for India and Southeast Asia. The firm has raised $695 million for this fund, which is its fifth since it expanded into India 12 years ago.

Reports at the beginning of this year suggested that the firm was shooting for a $1 billion fund, perhaps influenced by SoftBank’s gargantuan Vision Fund, but it was later reported that the target was cut to $650-$700 million.

This new money for Asia is reflective of Sequoia’s activity elsewhere in the world, where it is piling up cash for more details. The firm is in the final stages of raising an $8 billion global fund while it is said to be preparing a China fund that could reach as high as $6 billion, with participation from e-commerce firm JD.com and state-owned Starquest Capital. It secured a $180 million seed fund in the U.S earlier this year.

With this new money, Sequoia India said it plans to “double down” on technology, consumer and healthcare startups to “unleash the potential” of the two regions, which collectively over 800 million internet users. That number is growing fast among India, population 1.3 billion, and Southeast Asia, population 650 million.

Beyond being one of the premier VCs in the U.S. and China, Sequoia also enjoys a top-tier reputation in Asia and, more recently, in Southeast Asia where it has accelerated its presence in recent years. To date, the firm has made over 200 investments in India, which include major hits like unicorn Zomato, Freshworks (which is headed to IPO), Freecharge (which was acquired by Snapdeal), Pine Labs (which recently raised from PayPal), JustDial (which went public in 2013) and OYO Rooms, which is backed by SoftBank’s Vision fund.

The firm has expanded to Southeast Asia in recent years, after first opening an office in 2012, and it said that the region accounts for 20-30 percent of portfolio value. That’s a ratio it intends to maintain going forward — which means there’s no dedicated Southeast Asia fund, for now at least.

Already, though, Sequoia has gotten itself into a number of Southeast Asia’s top startups. They include Indonesian unicorn trio Go-Jek, Tokopedia and Traveloka, Singapore’s Carousell and e-commerce startup Zilingo. The fact that Sequoia India managing director Shailendra Singh relocated to Singapore also speaks volumes about how seriously the firm is taking Southeast Asia — even though, as mentioned, there’s no standalone fund.

“As we look to the future, the menu of investment opportunities is unprecedented — from mobile internet to online brands, enterprise SaaS to AI, crypto to deep tech in healthcare, new age consumer brands and beyond,” Sequoia wrote in a blog post announcing its new fund.

“India and Southeast Asia, meanwhile, are at an inflection point, and we are witnessing incredible quality of new investment opportunities,” it added.

Finally, the firm has announced some staff changes. Most notably, managing director Abhay Pandey is leaving after an 11-year stint to focus on investment opportunities in the consumer space, according to Sequoia. Pandey joined Sequoia from Merrill Lynch in 2007 and he previously spent time with Credit Suisse and McKinsey.

Abhay Pandey is leaving his role as managing director at Sequoia’s India fund after more than 11 years

There are also promotions. Former Facebook product manager Abheek Anand is now managing director with a focus on Southeast Asia, while four VPs —  Ishaan Mittal, Sakshi Chopra, Ashish Agarwal and Harshjit Sethi — have stepped up to become principals.

News Source = techcrunch.com

Three Indonesian tech unicorns unite to back digital insurance startup

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It’s almost unheard of to see three unicorns join forces to fund a startup, but that’s exactly what has happened in Indonesia.

Ride-hailing company Go-Jek, e-commerce firm Tokopedia and travel booking startup Traveloka — each of which is valued in the billions of U.S. dollars — have come together to provide a Series A funding round for PasarPolis, a digital insurance startup in Indonesia aiming to tap Southeast Asia’s growing internet economy.

PasarPolis started out as an insurance comparison site but today it offers micro- and modular-insurance online. Go-Jek, Tokopedia and Traveloka are three of its major clients through which it offers ‘click box’ policies that are bundled with ride-hailing trips, e-commerce sales and travel deals.

The round itself is undisclosed but TechCrunch understands that it is in range of $5-8 million, as was earlier reported by Deal Street Asia.

PasarPolis founder and CEO Cleosent Randing told TechCrunch in an interview that the deal was strategic and aimed at developing new products with the three companies, which he estimates provide “access to 100 million insurable hits per month.” He said that the startup could be picky because it is already cash flow positive.

“We were very very selective with this round, it’s something we are keeping quite low profile,” he explained. “It’s more of how we can be the provider of choice for the largest digital companies in Indonesia… we feel it’s a strategic investment and collaboration to advance micro insurance via the internet.

“Do they believe in the vision and can they help make the vision a reality but giving customers much cheaper, more modular insurance which is more relevant in today’s digital economy?” he added.

[Left to right:] Tokopedia COO Melissa Siska Juminto, Go-Jek chief human resources officer Monica Oudang, PasarPolis founder & CEO Cleosent Randing, Minister of Communications and Informatics Rudiantara, and Traveloka SVP of business development Caesar Indra

Beyond obvious consumer-focused products, PasarPolis has developed programs such as life insurance for Go-Jek drivers, and health care initiatives for SMEs that sell product on Tokopedia. In the travel space, he pointed out that growth in insurance revenue for companies like Expedia is outstripping ticket sale growth which bodes well for Traveloka.

PasarPolis is currently waiting on the result of an application for an insurance license which will give it new options for products beyond its current setup of working with insurers on underwriting. That’ll take some time, however, and right now the focus is on developing new insurance products, cementing its position in the market and also expanding into new markets in Southeast Asia — which now has more internet users than the entire population of the U.S., according to a report co-authored by Google.

Its work with Go-Jek will take it into markets like Vietnam and Thailand — where Go-Jek is expanding its ride-hailing business — but Randing said he is also in talks with other companies and insurance providers to offer more modular options for consumers. That could take the form of usage-based car insurance, or cover for public transport-based delays, he explained.

“Our goal is to make insurance less expensive than half of cup of a Starbucks coffee,” Randing said. Adding that the company may look for new funding in early 2019 as it grows its regional footprint.

Interestingly, PasarPolis has already gone overseas by tapping India for talent — which is something Go-Jek and others have also done. Randing said the company has 15-20 engineers in Bangalore, while the core team, partner support and tech integration staff are housed in Indonesia.

News Source = techcrunch.com

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