Singapore-based fashion marketplace Zilingo has raised US$17 million in a Series B round led by Burda Principal Investments and Sequoia Capital India.

Prominent angel investors Tim Draper and Manik Arora joined the round. Existing investors, Venturra Capital, SIG, Beenext and Wavemaker participated as well.

Zilingo will use the new tranche of financing to fund its growth in Indonesia and to increase its supply base. The company last raised US$8 million in late 2016 and US$2 million the year before that.

“It seems only yesterday that Zilingo started with a seed round from Sequoia India. It is terrific to see how they have progressed towards building the leading fashion and lifestyle e-commerce company in SE Asia. We are thrilled to continue to partner with Ankiti, Dhruv and their young, high energy team.” Says Shailendra Singh, Managing Director, Sequoia India.

Launched in 2015 by former Sequoia Capital analyst Ankiti Bose and software engineer Dhruv Kapoor, Zilingo provides sellers with facilities such as free shipping, free packaging, doorstep pickup and free and secure payment options.

In addition, it helps sellers to maximise their reach through various tools and strategies. This is important because Zilingo’s marketplace focusses on the long tail of merchants, also known as merchants who deal with niche products. And many of Zilingo’s early (and current) merchants hailed from Thailand and Indonesia — these group of vendors typically hawk their wares in small shops in large shopping malls or along streets and had little knowledge of online shopping.

In an interview with e27, Bose says that Zilingo helps these merchants get up to speed with e-commerce by offering nine sets of tools that help them manage inventory, account servicing, catalogue servicing, product photo shoots, and more.

Additionally, vendors can also pay to increase their products’ reach on the platform.

Since Zilingo’s sellers are not mainstream brands, pegging an accurate price to each product is tricky as there is no clear standard of reference. For new merchants, that could be a point of contention.

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What Zilingo does to address this issue is use analytics to get a good estimate of the product’s suitable price. These would include gathering statistics on the product’s click rate, product comparison from different merchants, and other guidelines.

Having said that, Bose says merchants are at liberty to accept or refuse the recommendation. The merchants have full rein over their pricing decisions.

Being sustainable

Unlike broader fashion marketplaces such Zalora, which has been dipping in red ink for months, Bose says Zilingo has always managed to maintain positive unit economics. Part of that stems from it focussing on revenue-generation from that beginning.

To give you an example, part of the reason why Zalora is struggling now because it was burning loads of cash trying to establish footholds in various markets; it was also fond of giving out discount codes, which not only reduced its margins, but also did little in way of attracting high quality recurring customers.

Zilingo, on the other hand, is less focussed on scaling, eschewing spray-and-pray marketing tactics in favour of ensuring its sellers maximise product sales by leveraging data analytics. Bose also says Zilingo has been charging commissions — ranging from 10 to 20 per cent — on all products sold from the day it first launched.

With regards to customer retention, Zilingo focusses primarily on online advertising on Facebook or Instagram, especially the video stories functions of each platform. It also has a video player within the platform that allows users to buy products they see on the video ads immediately. Bose claims that over 45 per cent of Zilingo’s visitors are recurring users. Majority of them are between the ages of 18 – 27, she adds.

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The addition of its new investors will go a long way in helping Zilingo scale quickly. There are several synergies between Burda Principal Investments and Zilingo. Burda is run by Hubert Burda Media, a European media conglomerate with expertise in e-commerce businesses and fashion and lifestyle brands.

In addition, combined with Tim Draper’s long experience in Silicon Valley and Manik Arora’s expertise in Indian markets, Bose says she will be able to count on them for sound advice in these various markets.

Image Credit: Zilingo