Telio’s shutdown signals deeper B2B ecommerce woes

Telio, one of Vietnam’s most prominent B2B ecommerce companies, shut down in late 2024 after failing to secure additional funding or get acquired, founder Sy Phong Bui confirmed in an interview with Tech in Asia.

According to Bui, Telio suspended its Vietnam operations at the end of November 2024 and dissolved its legal entity in the country in December. As a result, around 400 employees were laid off, including its tech team in India.

Photo credit: Telio

In an August 2024 interview with Tech in Asia, Bui said Telio had reduced its monthly losses to US$280,000 – an 80% drop from its peak of US$1.4 million.

Initially, the company aimed to achieve EBITDA profitability by mid-2026 in the hopes of raising between US$10 million and US$15 million in funding by the end of 2024. However, neither the funding nor potential M&A opportunities materialized.

Founded in 2019, Telio set out to connect small retailers, particularly mom and pop stores, with brands and wholesalers. It was among the first startups in Vietnam to digitalize these shops, which are known locally as cửa hàng tạp hoá and are similar to warungs in Indonesia and sari-sari stores in the Philippines.

Telio raised about US$52.5 million in funding across five rounds from prominent investors, such as Tiger Global, Granite Asia, Peak XV, and VNG.

See also: A David vs. Goliath battle in Vietnam’s B2B ecommerce sector

The company began making significant efforts to scale back operations and cut costs in mid-2022, focusing on optimizing and diversifying away from low-margin items. But these measures were too late, as they came after Telio had expanded aggressively in its first two years.

Telio couldn’t overcome the fundamental challenges of B2B ecommerce, such as high operational costs, the thin margins of fast-moving consumer goods, and the layers of middlemen between stores and suppliers. The company’s scale also prevented it from sustaining a high-margin, low-volume sales strategy, Bui says.

He estimates that at the time of its closure, Telio’s monthly sales was at US$2.5 million to US$3 million. But since its runway was depleted, the company had no choice but to close.

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This is Bui’s second failed startup venture. In 2015, he established OnOnPay, a mobile wallet and phone top-up startup, to capitalize on the smartphone boom in Vietnam. Telio, his second venture, was inspired by his experience attending Alibaba’s eFounders Fellowship program.

In 2020, Bui lost a two-year lawsuit in Singapore against his previous investors for using their resources to develop Telio without their permission.

It remains unclear whether Telio’s investors have written off their investment. Tech in Asia has reached out to several of them to verify the matter.