Sequoia joins $22.5m round for Bangladesh's ShopUp

Austria’s Speedinvest, Netherlands-based Veon Ventures, and Lonsdale Capital Singapore also participated. The investment is being called the largest ever Series A in a Bangladeshi start-up. It will support an expansion of the company’s retail and manufacturing network as well as a technology build-out.

ShopUp provides B2B services to micro and small to medium-sized enterprises (MSME) such as inventory sourcing, last-mile logistics, digital credit, and business management support. The idea is to help mom-and-pop businesses, which account for 98% of Bangladesh’s retail sector, to expand by improving profitability and operational efficiency.

ShopUp is also active in India, where it set up an office earlier this year and merged with Sequoia-backed fashion portal Voonik. Sequoia India initially supported ShopUp as part of its Surge accelerator program for India and Southeast Asia, which invested a similar company called BukuKas alongside Speedinvest in August. The VC firm has referred to ShopUp as a pioneer in its field.

With some 4.5 million MSMEs, Bangladesh is considered one of the most fragmented retail markets in Asia with severe challenges around procuring goods from multiple distributors, accessing formal financing channels, and a lack of pricing transparency. COVID-19 has increased the strain on the ecosystem by causing a sudden rise in consumer demand for essential goods.

As a result, many MSMEs have moved to online channels such as Facebook to reach new customers, exacerbating a gap in last-mile logistics. ShopUp, which is active in last-mile via a service called RedX, claims to have grown 8.5x between April and August. It says RedX is now the largest last-mile service provider in Bangladesh, processing 13x more parcels per day than it did in April.

“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,” Smita Aggarwal, global investments advisor at Flourish, said in a statement.

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• Topics
• South Asia
• Support services
• Early-stage
• Bangladesh
• Sequoia Capital
• Logistics
• Financial Services