A startup that’s aiming to digitize thousands and thousands of neighborhood shops in Bangladesh simply raised the nation’s largest Sequence A financing spherical.
Dhaka-headquartered ShopUp mentioned on Tuesday it has raised $22.5 million in a spherical co-led by Sequoia Capital India and Flourish Ventures. For each the enterprise corporations, that is the primary time they’re backing a Bangladeshi startup. Veon Ventures, Speedinvest, and Lonsdale Capital additionally participated within the four-year-old ShopUp’s Sequence A financing spherical. ShopUp has raised about $28 million so far.
Like its neighboring nation, India, greater than 95% of all retail in Bangladesh goes via neighborhood shops within the nation. There are about 4.5 million such mom-and-pop shops within the nation and the overwhelming majority of them haven’t any digital presence.
ShopUp is making an attempt to alter that. It has constructed what it calls a full-stack business-to-business commerce platform. It gives three core providers to neighborhood shops: a wholesale market to safe stock, logistics (together with final mile supply to clients), and dealing capital, defined Afeef Zaman, co-founder and chief govt of ShopUp, in an interview with PJDM.
These small retailers are dealing with a variety of challenges. They don’t seem to be getting stock on time or sufficient stock and they’re paying greater than what they need to, mentioned Zaman. And for these companies, more than 73% (PDF) of all their gross sales depend on credit score as an alternative of money or digital funds, creating an enormous liquidity crunch. So most of those companies are in dire want of working capital.
Zaman declined to disclose what number of mom-and-pop retailers immediately use ShopUp, however claimed that the platform assumes a transparent lead in its class within the nation. That lead has widened amid the worldwide pandemic as extra bodily retailers discover digital choices to remain afloat, he mentioned.
The variety of neighborhood retailers transacting weekly on the ShopUp platform grew by 8.5 occasions between April and August this yr, he mentioned. The pandemic additionally helped ShopUp interact with e-commerce gamers to ship gadgets for them.
“Sequoia India has been a robust supporter of the corporate because it was a part of the primary Surge cohort in early 2019 and it’s been thrilling to see the corporate change into a trailblazer facilitating digital transformation in Bangladesh,” mentioned Klaus Wang, VP, Sequoia Capital, in a press release.
The startup has no intention to change into an e-commerce platform like Amazon that instantly engages with customers, Zaman mentioned. E-commerce remains to be in its nascent stage in Bangladesh. Amazon has but to enter the nation and more and more Facebook is filling that role.
ShopUp sees immense alternative in serving neighborhood shops, he mentioned. The startup plans to deploy the recent capital to deepen its partnerships with producers and develop its tech infrastructure.
It opened an workplace in Bengaluru earlier this yr to rent native tech expertise within the nation. Indian e-commerce platform Voonik merged with ShopUp this year and each of its co-founders have joined the Bangladeshi startup. Zaman mentioned the startup will rent extra engineering expertise in India.
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