ShopUp commerce platform raises $ 75 million led by Valar in Bangladesh’s biggest fundraiser – TechCrunch
ShopUp, a startup that is digitizing neighborhood stores in Bangladesh, has raised $ 75 million in a new funding round that is also the largest in the South Asian market.
Valar Ventures led by Peter Thiel ShopUpof $ 75 million in Series B. Prosus Ventures along with existing investors Flourish Ventures, Sequoia Capital India and VEON Ventures have also invested in the round. The new investment, which brings the startup’s all-time increase to over $ 100 million, is also Valar and Prosus’ first contract in Bangladesh, which is home to more than 100 million internet users.
Like its neighbor, India, more than 95% of all retail businesses in Bangladesh go through neighborhood stores. There are around 4.5 million such mom-and-pop stores nationwide, and the vast majority of them have no digital presence.
As is the case in India, Pakistan and several other Asian countries, these small stores face a number of challenges in Bangladesh. They do not have access to a large catalog for stock selection and they cannot negotiate good prices 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 squeeze.
ShopUp tries to meet these challenges. He has built what he calls a full stack business-to-business commerce platform. The startup provides a number of basic services to these stores, including a wholesale market 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.)
Over the past year, the startup has broadened its offerings and deepened its footprint in Bangladesh, said Afeef Zaman, co-founder and CEO of ShopUp, in an interview with TechCrunch. For example, it has partnered with the country’s largest manufacturers, producers and distributors to secure and deliver inventory to small stores, he said. And its logistics offer is already the largest in Bangladesh.
The startup, like several others, has been hit by the pandemic, but as the country begins to open up, ShopUp is starting to recover, he said. Overall, business has grown more than 13 times in the past year, he said.
âThe ShopUp management team has demonstrated strong execution skills over the past twelve months. They have become clear market leaders with double-digit growth in three products designed for underserved small businesses in Bangladesh. In fast growing border economies like Bangladesh, small businesses are the main engine of the economy. We are delighted to partner with Afeef’s vision of creating an ecosystem of connected products to accelerate their transition to the online economy, âsaid James Fitzgerald, founding partner of Valar Ventures, in a statement.
Zaman said the past year has accelerated the adoption of the technology among these small stores in Bangladesh. âThey now use multiple Internet services. Not just ShopUp, but also messaging and virtual payments, âhe said. “We expect this to continue to move forward.”
The Dhaka-based startup, which has an office in Bangalore, where much of its tech and engineering talent is based, plans to deploy the fresh funds in part to expand its team. As part of the new round, Zaman said the startup has tripled its pool of employee stock options.
âThis investment marks our entry into Bangladesh, one of the fastest growing economies over the past decade. ShopUp has demonstrated a strong focus on execution by responding to a cross section of the needs of small businesses in a fragmented market. We are delighted to support their efforts to empower millions of retailers and enable them to participate in the country’s economic growth, âsaid Ashutosh Sharma, India Investment Manager at Prosus Ventures, in a statement.