Ankiti Bose, India's First Female Unicorn Founder Suspended. Why?

Singapore’s high-profile start-up Zilingo PTE has suspended its Chief Executive Officer Ankiti Bose after an effort to raise new funding led to questions about the company’s accounting. Ankiti Bose suspension is supposed to remain effective until May 5.

The company, which supplies technology to apparel merchants and factories, was trying to raise $150 million to $200 million with help from Goldman Sachs Group Inc. when investors began to question its finances as part of the due diligence process, reports suggest.

According to the reports, the company would have been valued at more than $1 billion but was stalled because of the enquiry. The investors including Temasek Holdings Pte and Sequoia Capital India, have begun an investigation into the company’s financial practices. The auditor raised questions about the company’s accounting.

What Is The Case All About?

• Zilingo was set up by Ankiti Bose and Chief Technology and Product Officer Dhruv Kapoor in Singapore seven years ago to help small businesses across South and Southeast Asia sell their goods online. Once they realised that many merchants did not have access to robust technology and capital, the company developed software and other tools which would benefit merchants to access factories across the globe and would smooth the complicated process of shipping internationally.
• In 2018, the unicorn start-up started teaming up with financial technology firms that could provide small amounts of money to merchants to buy raw materials and produce goods. In 2019, the firm raised $226 million from investors including Sequoia and Temasek which increased its valuation to nearly 1 billion mark. The made Zilingo a unicorn.

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• Zilingo grew into a marketplace for wholesale buyers and sellers in the fashion industry but was troubled with growth because pandemic induced restrictions on small businesses which led to their closing.
• After taking the necessary steps for cost-cutting, the company reportedly began making aggressive pitches to raise fresh capital. In 2021, it was forecasted that the company would rise from about $40 million in fiscal 2021 to roughly $60 million in fiscal 2022 and $100 million the year after. Reportedly, Zilingo said it anticipated reaching almost $200 million by fiscal 2026.
• However, on March 31, Bose was summoned for a meeting where she was informed about “serious” discrepancies in accounts and mismanagement. She was later questioned by members of Kroll, an investigative firm.
• The concerns centre on the way that Zilingo, which regulators said had not filed annual financial statements since 2019, accounted for transactions and revenue across a platform spanning thousands of small merchants.