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ShopUp Raises $22.5 Million in New Series A Funding Co-led by Sequoia Capital India and Flourish Ventures

ShopUp, Bangladesh’s leading full-stack B2B commerce platform for neighborhood shops and online sellers, has raised a Series A round of $22.5 Million. This is the largest Series A round by a Bangladeshi company and was co-led by Sequoia Capital India and Flourish Ventures, with additional participation through VEON Ventures, Speedinvest, and Lonsdale Capital (Singapore). ShopUp is Sequoia Capital India and Flourish Ventures’ first investment in Bangladesh. 

There are 4.5 Million neighborhood mom-and-pop shops in Bangladesh, known locally as Mudi Dokaans, 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. A recent study found 73% of these retailers' sales are credit sales to end consumers, whereas only 27% of small businesses in Bangladesh have access to formal financing to support their liquidity. 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. This helps 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. 

ShopUp opened its office in Bengaluru, India earlier this year, aiming to expand and hire talent aligned to the company’s vision and goal. E-commerce platform Voonik also recently merged with ShopUp, with both founders of Voonik joining 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 & CEO of ShopUp. 

“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. We have a deeply passionate team that is committed to playing its part in redefining Bangladesh’s growth story.” 

“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”, said Klaus Wang, VP, Sequoia Capital (India) Singapore. 

“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,” said Smita Aggarwal, Global Investments Advisor, Flourish Ventures. 

“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. 

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