ShopUp is Sequoia Capital India and Flourish Ventures' first investment in Bangladesh
Bangladesh's leading full-stack B2B commerce platform for neighborhood shops and online sellers, ShopUp has raised a Series A round of $22.5 million.
This is the largest Series A round in Bangladesh and was co-led by Sequoia Capital India and Flourish Ventures, with additional participation through VEON Ventures, Speedinvest, and Lonsdale Capital (Singapore), a press release said on Tuesday.
ShopUp is Sequoia Capital India and Flourish Ventures' first investment in Bangladesh.
There are 4.5 million neighborhood mom-and-pop shops (mudi dokaans) in Bangladesh 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 unavailability of products, compounded by other challenges such as the lack of transparent pricing and inefficient delivery systems, create serious obstacles for entrepreneurs in running their day-to-day business.
ShopUp offers small businesses easy access to B2B sourcing, last-mile logistics, digital credit, and business management solutions which help 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.
Afeef Zaman, co-founder and chief executive officer (CEO) of ShopUp, said: "We always believed this decade would be about the rise and maturity of small businesses in Bangladesh.”
"We believed in the power of internet and technology adoption by small businesses and founded ShopUp as we wanted to be a key driver of this transformation. Covid-19 has further underscored the need for digital transformation for the country's smaller businesses.
"This fresh round of funding will support us in increasing our retail reach, deepening our partnerships with manufacturers, and focusing on building tech-first infrastructure."
Klaus Wang, vice president of Sequoia Capital (India) Singapore, said: "ShopUp is the pioneer of the full-stack digital platform for mom-and-pop shops in Bangladesh, 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."
Smita Aggarwal, Global Investments Advisor, Flourish Ventures, said: "ShopUp has a unique tech-driven business model that combines commerce, logistics, and embedded finance to address the needs of small businesses in Bangladesh and helps them grow.”
"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 the formalization and inclusion of hundreds of thousands of small businesses, including a large number run by women."
Covid-19 has increased the strain on the traditional supply-chain ecosystem, with a sudden rise in demand from consumers looking for essential goods.
The number of neighborhood shops transacting weekly on the ShopUp platform has grown by 8.5 times between April and August 2020.
Additionally, in order 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 is now the largest last-mile delivery service provider in Bangladesh, processing 13 times more parcels daily than it did in April.