The goal of bringing the country’s neighbourhood shops and online sellers on a single digitised platform is one step ahead: ShopUp has raised the largest Series-A financing.
The startup has just made the disclosure of raising $22.5 million in a round co-led by Sequoia Capital and Flourish Ventures. Such an achievement amid this pandemic is a remarkable success.
So how has the journey been so far for ShopUp?
While visiting his grandparents’ home in Patuakhali, Afeef Zaman noticed that there are potters who produce traditional clay-made utensils, dolls, knick-knacks, but fail to secure the deserved price. Handy plastic products also dictate many people’s choice of not buying clay-made potteries.
That experience prompted Zaman to do something for them that would also preserve the country's traditional crafts and help the merchants to survive this competitive market.
Afeef Zaman then contacted his friends and shared his idea to bring small business owners and sellers on an online platform. Today’s ShopUp is the outcome of that dream.
It’s the journey of three friends as co-founders of the startup.
Afeef Zaman is the Chief Executive Officer of ShopUp, Siffat Sarwar is the Chief Operating Officer and Ataur Rahim Chowdhury is the Chief Technological Officer. "We always believed this decade would be about the rise and maturity of small businesses in Bangladesh," said Zaman.
Also, VEON Ventures, Speedinvest, and Lonsdale Capital (Singapore) are collectively investing in ShopUp. And this is the first time that any initiative of Bangladesh has received such a big investment.
Klaus Wang, vice-president of Sequoia Capital (India) Singapore, said, “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.”
Registered in 2018, ShopUp partnered with BRAC as the country's first Embedded Finance offering startup. In the same year, Omidyar Network invested US$1.6 million in it. In April 2019, Surge invested US$3.2 million and Bill and Melinda Gates Foundation joined in partnership with ShopUp in that series.
ShopUp Store is a free platform that allows one a get-at-able way to start their online business.
About 4.5 million neighbourhood mom-and-pop stores or locally known mudi dokans (grocery shops) are in operation in Bangladesh that consists of 98 per cent of the retail sector. Majority of these small retailers face constant challenges in procuring goods from multiple distributors and wholesalers. A recent study found 73 per cent of these retailers' sales are credit sales to end consumers, whereas only 27 per cent of small businesses in Bangladesh have access to formal financing to support their liquidity.
Unavailability of products, lack of transparent pricing, and inefficient delivery systems create obstacles to these small entrepreneurs in running their day-to-day business.
ShopUp has dreamt of changing the overlong process and created B2B or ‘business to business’ platform where it provides an easy way of connecting producer to wholesaler, wholesaler to retailer and retailer to consumer. It has executed an apparently impossible task bringing this vast majority to the digital platform. It also offers services like last-mile logistics, digital credit and business management solutions.
During the pandemic, many traditionally-run shops have shifted to online platforms, a transformation which has been a ray of hope. Consumers too have welcomed the supply of essential goods through home delivery. Thus many have survived the pandemic challenges.
The number of neighbourhood shops transacting weekly on the ShopUp platform has grown by 8.5 times between April and August 2020. ShopUp's last-mile logistics team, RedX, is partnering with these shops and has now become the largest last-mile delivery service provider in the country, processing 13 times more parcels daily than it did in April.
"ShopUp has a unique tech-driven business model that combines commerce, logistics, and embedded finance to address the needs of small businesses and helps them grow," said Smita Agarwal, global investments advisor at Flourish Ventures, adding. “It’s heartening to see how ShopUp adapted to the crisis and is accelerating formalisation and inclusion of hundreds of thousands of small businesses, including a large number run by women."
ShopUp was awarded as ‘The Best Startup of The Year 2019 Bangladesh’ by the Honorable Prime Minister. Currently, it is working with 655,000 small and medium enterprises (SMEs) and micro, small and medium enterprises (MSMEs) to help them grow, and in turn, play a major role in advancement of the Bangladesh economy.
The startup has earlier this year opened a branch of its office in Bengaluru, India, with the aim of expanding the company. It has acquired Indian e-commerce platform Voonik recently which merged with ShopUp, and their founders have joined ShopUp as co-founders.
This year seems to be the year of ShopUp!
ShopUp’s next target is to make sure all their merchants and SMEs get used to technology while ShopUp becomes a voice of the small business owners or sellers.
Afra Nawmi is currently studying at the Department of Mass Communication and Journalism at the University of Dhaka.