Bangladeshi B2B commerce platform ShopUp has raised $22.5 million in a funding round co-led by Sequoia Capital India and Flourish Ventures, in what was the country’s largest Series A round.
Other participating investors included VEON Ventures, the venture capital arm of Amsterdam-based Internet firm VEON Ltd, European fund Speedinvest and Lonsdale Capital (Singapore). ShopUp is also Sequoia Capital India’s and Flourish Ventures’ first investment in Bangladesh, the startup said in a statement.
“Sequoia India has been a strong supporter of the company… and it’s been exciting to see the company become a trailblazer facilitating digital transformation in Bangladesh,” said Klaus Wang, vice president at Sequoia Capital (India) Singapore.
ShopUp provides B2B sourcing, logistics, and financial services to micro, small and medium enterprises (MSMEs) through its mobile-first digital platform, and last-mile logistics service RedX. Its embedded financial services product provides these small shops with access to digital credit through partnerships with local financial institutions.
The startup is “helping neighbourhood shops and online sellers overcome the supply chain challenges of Bangladesh’s highly-fragmented wholesale, retail, and distribution channels,” VEON said in a separate announcement.
There are 4.5 million neighborhood mom-and-pop shops in Bangladesh, known locally as Mudi Dokaans, that account for 98 per cent of the country’s retail sector, making Bangladesh one of the most fragmented retail markets in Asia, according to ShopUp.
The startup opened its office in India earlier this year, following a merger with Bengaluru-based e-commerce platform Voonik. Voonik founders have consequently joined ShopUp as co-founders.
“We always believed this decade would be about the rise and maturity of small businesses in Bangladesh,” said Afeef Zaman, co-founder and CEO of ShopUp.
“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,” he added.
ShopUp claimed that the number of neighborhood shops transacting weekly on its platform has grown by 8.5 times between April and August 2020, while its last-mile logistics unit, RedX, is processing 13 times more parcels daily than it did in April.