🤯 How Telio lost $1.4M/month at $3M/month revenue (and died)

Hey Founders,

Welcome to The Runway Ventures — a weekly newsletter where I deep dive into failed startup stories to help you become the top 1% founder by learning from their mistakes with actionable insights.

Today’s story is about how Telio, Vietnam’s hottest startup, lost $1.4M/month and died (despite being backed by VNG). Let’s get to it! 🚀

☠️ 1 Failed Startup: Telio

🚀 The Rise of Telio

🇻🇳 Founded by Bui Sy Phong (CEO), Nguyen Nhat Huy (COO) and Pham My Linh (Chief Strategy Officer) in November 2018, Telio was Vietnam’s first B2B e-commerce platform to connect small retailers with brands and wholesalers through a centralised platform.

• The Problem — 📦 Small retailers in Vietnam were struggling with inefficient logistics as they had to deal with multiple suppliers and lacked transparency in pricing.

  • This is because Vietnam’s retail market was very fragmented — small "mom and pop" shops account for over 60% of FMCG (Fast-Moving Consumer Goods) sales in urban areas and a staggering 90% in rural Vietnam.

  • Not only that, shopkeepers often had no way to compare prices or even know if a product was in stock.

  • Imagine being a small shop owner and having to call or visit dozens of different suppliers just to stock your store — it was a logistical nightmare.

• The Solution — 🧩 Telio was a smartphone app where retailers could find, select, and order products from a wide range of brands and distributors in one place.

  • 🙆🏻‍♀️ For retailers — The platform offered more choices, better pricing through bulk purchasing power, and more efficient logistics through economies of scale.

  • 😎 For brands & producers — Telio provided more efficient turnover, reduced costs, and valuable data about end customers.

💰📈 With cash, Telio grew like crazy:

• Scaled from 200 to 600 employees in 2020.

• By 2022, the platform was serving 60,000 retailers across the country, offering sourcing solutions in 3 key verticals:

  • FMCG

  • Lifestyle (including cosmetics and fashion brands)

  • Healthcare (including medicine and medical equipment)

• Developed Teliobooks, an app that helped store owners manage debt and income with automatic reporting and reminders via SMS or Zalo messaging.

• Raised a total of $52 million across multiple rounds backed by Tiger Global, Sequoia Capital and VNG.

🤯 Yes, Telio was even backed by VNG. But it wasn't just about the $22.5 million investment — it was a strategic partnership that promised to supercharge Telio's growth.

Under the agreement, VNG would help Telio set up digital booths on Zalo — Vietnam's most popular messaging platform with over 64 million monthly users. This integration would allow retailers to place orders more easily and track deliveries through Zalo Official Account and Zalo Mini App.

🔥 At this point, Telio was unstoppable.

It had strong financial backing, impressive traction, a growing team of talent, and a strategic partnership with one of Vietnam's most successful tech companies. The future looked bright, and Telio was well on its way to becoming Vietnam's largest B2B commerce platform.

📉 The Fall of Telio

💸💸💸 Well… ultimately it came down to money and margins.

Telio was struggling with high operational costs coupled with razor-thin profit margins, especially in the FMCG sector.

Despite raising a boatload of money, Telio wasn’t profitable as it scaled too fast in its first 2 years while burning cash, with monthly losses reaching a staggering $1.4 million at their peak.

Bui tried to cut losses and fix internal challenges, but it was too late to undo the damage.

📌 Here’s what happened to Telio:

My take from Telio’s story?

Ambitious vision is great.

Getting funded is great.

Growing fast is great.

But if your business is not making profits and constantly relying on investors to fund you, your business will eventually run out of money and die.

Of course, you may argue that, “Let’s look at Amazon and Alibaba — they were losing money in the first 5 years but still became the largest e-commerce companies in the world today.”

Yes, you’re right. But those are the top 1% of all companies combined. As a founder, if you’re betting your next 10 years hopefully to become the next Amazon, that’s fine as long as you’re willing to take the risk.

Most founders just want to make some money and have a positive impact along the way. If that’s you, then building a profitable business from day 1 is not an option, but a non-negotiable. There’s no right or wrong decision here. Just the decision that fits you the best. Peace ✌🏻

Want to learn more about Telio’s downfall?

• Telio’s shutdown signals deeper B2B ecommerce woes

⚠️ 2 Mistakes

Mistake 1: Scaled too fast before nailing unit economics

Telio poured fuel on the growth fire — opening warehouses, hiring from 200 to 600 employees in a year, and onboarding thousands of merchants — while never truly validating that each order generated healthy margins.

🪓 FMCG B2B is infamously low‑margin, and Telio’s cost per delivery plus warehouse overhead meant they were losing big on every small retailer order.

They tried to make up for it with volume, but the scale just wasn’t enough to offset the low profitability. In the end, even with $2.5–3 million in monthly revenue, they couldn’t break even.

🔥 They hit $1.4 M monthly burn at peak, only later squeezing it back to $280 K — but by then the cash was gone.

Based on the financial reporting of Telio, despite hitting revenue of $158M, it was still losing $13M in Q4 2022. Insane.

Mistake 2: Relied too heavily on external funding

💸 With $52 M raised across 5 rounds, Telio assumed capital would always be there.

When markets tightened in 2023, their planned $50–60 M raise never came, forcing a bruising down‑round and finally a shutdown.

The business was built on the assumption that fundraising would always be an option, instead of building toward cash flow sustainability.

Capital can buy time, but it can’t buy product-market fit.

🧠 3 Lessons Learned

Lesson 1: Get your unit economics right before scaling

Scaling Bad Economics = Bigger Losses

If you’re losing $1 on every order, doing 10,000 orders just means you lose $10,000. Telio’s losses ballooned to $1.4 million a month because they scaled before proving they could make money per transaction.

Lesson 2: Don’t rely on investor money as a lifeline

Telio raised over $52 million from some of the world’s top investors. For a while, it looked like they could always just raise another round to cover their losses.

🤦🏻‍♂️ But when the market cooled and investors got cautious, that lifeline snapped. Suddenly, Telio’s burn rate was unsustainable, and there was no backup plan — forcing a shutdown even though revenue was still coming in.

If you’re in a similar space, start building a “default alive” plan — how would you survive if you had to live off your own revenue?

Lesson 3: Capital can’t buy product-market fit

Product-market fit means your product actually solves a real, pressing problem for a specific group of customers who want it enough to pay for it and keep coming back.

Scaling with big checks feels great — until you realise that no amount of cash can mask a product that customers don’t love or a market you haven’t fully validated.

And this is what happened to Telio.

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That’s all for today

Thanks for reading. I hope you enjoyed today's issue. More than that, I hope you’ve learned some actionable tips to build and grow your business.

You can always write to me by simply replying to this newsletter and we can chat.

See you again next week.

- Admond

Disclaimer: The Runway Ventures content is for informational purposes only. Unless otherwise stated, any opinions expressed above belong solely to the author.