ShopUp, a Dhaka-based B2B commerce startup digitizing neighborhood shops with an ecosystem of solutions from marketplace to logistics to capital, announced that it has raised $75 million in a Series B funding round. The round is led by Peter Thiel’s Valar Ventures and participated by new investor Prosus Ventures and existing investors Flourish Ventures, Sequoia Capital India, and VEON Ventures.
ShopUp raised its $22.5 million Series A in October last year. The new investment brings the startup’s all-time raise to over $100 million. This is the largest round raised by any Bangladeshi startup so far and also the first investment in the country by Valar and Prosus. ShopUp has seen strong growth, 13 times in the last one year per TechCrunch, amid the pandemic. With the fresh fund, the company looks to expand its team and push growth further.
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 challenges in procuring goods from multiple distributors and wholesalers across an equally fragmented supply chain.
A last year’s study found 73% of these retailers' sales are credit sales to end consumers and 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, creates serious obstacles for these entrepreneurs.
ShopUp says it has built a full-stack business-to-business commerce platform to address these challenges. The company offers a number of core services to these small businesses including B2B sourcing through a wholesale marketplace, logistics, and working capital through partnerships with banks and other partners 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.