[Funding Alert] Sequoia Capital India, Flourish Ventures invest $22.5M in Bangladesh-based startup ShopUp

ShopUp, the Bangladesh-based full-stack B2B commerce platform for neighbourhood shops and online sellers, has raised $22.5 million Series A funding co-led by Sequoia Capital India and Flourish Ventures. This is the largest Series A round in Bangladesh. The round saw participation from VEON Ventures, Speedinvest, and Lonsdale Capital (Singapore).

It also is the first investment by Sequoia Capital India in Bangladesh. The startup had also opened its office in Bengaluru earlier this year to expand and hire talent. The press statement shared by Sequoia Capital India said ecommerce platform Voonik also recently merged with ShopUp, with both founders of Voonik joining ShopUp as co-founders. 

Afeef Zaman, Co-founder and CEO of ShopUp, said in a statement,

“We always believed this decade would be about the rise and maturity of small businesses in Bangladesh. 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."

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The platform provides small businesses easy access to B2B sourcing, last-mile logistics, digital credit, and business management solutions. This helps the neighbourhood 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 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 in the press statement.

The statement added that the number of neighbourhood shops transacting weekly on the ShopUp platform has grown by 8.5 times between April and August 2020. There are 4.5 million neighbourhood mom-and-pop stores in Bangladesh, which are also known as Mudi Dokaans. The team added that this accounted for a whopping 98 percent of the country's retail sector. Several small retailers thus face constant challenges in procuring goods from multiple distributors and wholesalers across an equally fragmented supply-chain.

Smita Aggarwal, Global Investments Advisor, Flourish Ventures, added in the press statement, “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. Small businesses were among the worst hit during the pandemic and it’s heartening to see how ShopUp adapted to the crisis and is accelerating the formalisation and inclusion of hundreds of thousands of small businesses, including a large number run by women.”

Several 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 service RedX too is partnering with these shops. The statement added it is the largest last-mile delivery service provider in Bangladesh and processes 13 times more parcels than it did in April.