ShopUp, a startup that is digitizing neighborhood stores in Bangladesh, has raised $75 million in a new financing round that is also the largest in the South Asian market.
Peter Thiel’s Valar Ventures led ShopUp’s $75 million Series B financing round. Prosus Ventures as well as existing investors Flourish Ventures, Sequoia Capital India, and VEON Ventures also invested in the round. The new investment, which brings the startup’s all-time raise to over $100 million, is also Prosus’ first deal in Bangladesh, home to over 100 million internet users.
Like its neighboring nation, India, more than 95% of all retail in Bangladesh goes through neighborhood stores in the country. There are about 4.5 million such mom-and-pop stores in the country and the vast majority of them have no digital presence.
As is the case in India, Pakistan and several other Asian countries, these small shops face a number of challenges in Bangladesh. They don’t have access to a large catalog for inventory selection and they can’t negotiate good pricing and faster delivery. And for these small retailers, more than two-thirds of all their sales are still processed on credit instead of cash or digital payments, creating a massive liquidity crunch. So most of these businesses are in dire need of working capital.
ShopUp is attempting to address these challenges. It has built what it calls a full-stack business-to-business commerce platform. The startup provides a number of core services to these stores including a wholesale marketplace to secure inventory, logistics (including last-mile delivery to customers) and working capital. (Like many startups in India, ShopUp has banking and other partners to provide working capital.)
In the past one year, the startup has expanded its offerings and deepened its footprints within Bangladesh, said Afeef Zaman, co-founder and chief executive of ShopUp, in an interview with TechCrunch. For instance, it has partnered with country’s largest manufacturers, producers and distributors to secure and supply inventories to small shops, he said.
The startup, like several others, was hit by the pandemic, but as the country begins to open up, ShopUp is beginning to see recovery, he said. Overall, business has grown over 13 times in the past one year, he said.
“The leadership team at ShopUp has shown strong execution capabilities over the last twelve months. They became clear market leaders with double digit growth across three products built for the underserved small businesses in Bangladesh. In fast-growing frontier economies like Bangladesh, small businesses are the primary driver of the economy. We are excited to partner with Afeef’s vision of building a connected ecosystem of products to fast-track their transition to the online economy,” said James Fitzgerald, founding partner of Valar Ventures, in a statement.
This is a developing story. More to follow…
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