Malaysia-based drop shipping platform Kumoten announced that it has raised an undisclosed pre-Series A equity round led by Cradle Fund late last year, it said in a statement on Friday.
The round was also joined by seed investor Commerce.Asia. Fresh proceeds from the funding round will be used to expand its product research and development team and for talent acquisition, said Kumoten. The startup also plans to launch local operations in Indonesia, the Philippines and Thailand.
Founded in 2014, Kumoten claims to be the largest drop shipping platform in Malaysia with more than 100,000 stock keeping units in its catalogue. The platform provides online sellers with product data through its automated drop ship system which also automatically updates product inventory level, enabling online sellers to easily sync product details to various online marketplaces.
It also added that its active user base and gross merchandise volume has grown by five times since last May.
“We want online sellers to enjoy selling online and to focus on sales and marketing activities instead of worrying about the cost of investing in stocks, taking product photos and writing product descriptions. Most importantly, our investors believe in the founders and our management team’s ability to deliver on our financial goals. It helps that our team is also able to work closely with our investors to achieve greater heights,” said Kumoten co-founder and CEO Isaac Leong.
According to Leong, e-commerce in Southeast Asia is growing rapidly but is still considered to be at an early growth stage and that drop shipping complements this growth.
“The potential of drop shipping is in riding the e-commerce growth wave. We estimate by 2020, drop-shipping in Southeast Asia will have a $7.5-billion market size,” he said, adding that Kumoten adds 500 to 600 new items to its product list daily.