BENGALURU: Bangladesh-based B2B e-commerce startup ShopUp has raised $22.5 million as part of its Series A round co-led by Sequoia Capital India and Flourish Ventures.
VEON Ventures, Speedinvest and Lonsdale Capital (Singapore) also participated in the round.
The funding will help in increasing ShopUp’s retail reach, as it deepens its partnerships with manufacturers, and focues on building tech-first infrastructure.
ShopUp offers small businesses easy access to B2B sourcing, last-mile logistics, digital credit, and business management solutions. This helps these neighborhood mom-and-pop sellers achieve more profit with less effort, allowing them to focus their efforts towards engaging with their customers and business expansion.
ShopUp opened its office in Bengaluru earlier this year, aiming to expand and hire talent aligned to the company’s vision and goal. Indian e-commerce platform Voonik also recently merged with ShopUp, with both founders of Voonik joining ShopUp as co-founders, earlier this year.
“COVID-19 has further underscored the need for digital transformation for the country’s smaller businesses,” said Afeef Zaman, Co-founder & CEO of ShopUp.
“ShopUp is empowering its customers through high quality and timely product sourcing, reliable deliveries and accessible financing. Sequoia India has been a strong supporter of the company since it was part of the first Surge cohort in early 2019 and it’s been exciting to see the company become a trailblazer facilitating digital transformation in Bangladesh,” said Klaus Wang, VP, Sequoia Capital (India) Singapore.
There are 4.5 million neighborhood mom-and-pop shops in Bangladesh, known locally as Mudi Dokaans, that account for 98% of the country’s retail sector. This makes Bangladesh one of the most fragmented retail markets in Asia. The majority of these small retailers face constant challenges in procuring goods from multiple distributors and wholesalers across an equally fragmented supply-chain, the company said.
“Small businesses were amongst the worst hit during the pandemic and it’s heartening to see how ShopUp adapted to the crisis and is accelerating inclusion of hundreds of thousands of small businesses, including a large number run by women,” said Smita Aggarwal, Global Investments Advisor, Flourish Ventures.
The number of neighborhood shops transacting weekly on the ShopUp platform has grown by 8.5 times between April and August.
To cope with the impact of the pandemic, many smaller retail shops in Bangladesh have moved to online channels such as Facebook to reach new customers.
This in turn has created a massive long-tail demand for last-mile logistics. ShopUp’s last-mile logistics team, RedX, is partnering with these shops and processing 13 times more parcels daily than it did in April.
Back in India, there is B2B marketplace startup, Udaan, which helps small retailers connect with wholesalers and traders, across categories from lifestyle, electronics, home and kitchen, staples and toys, to groceries. The company also owns a logistics service, Udaan Express
Tencent- backed Udaan recently valued itself at $7.5 billion.
Earlier this week, even Dukaan, a startup that helps local stores to sell their products online, raised $6 million as a part of its seed funding round co-led by Matrix Partners India and Lightspeed India Partners.