Channelising Online Commerce for Development

Small businesses are the backbone of Bangladesh’s economy and digital connectivity is one of the effective routes to empower them. However, Bangladesh’s retail market is highly fragmented. It is dominated by small, scattered shops who are responsible for distributing food and household items across the country and they, by and large, face issues such as product unavailability, unreliable delivery, and paucity of sources of affordable financing.

Amidst this backdrop, ShopUp is doing a great service to Bangladesh’s economy by digitising the neighbourhood stores in Bangladesh, which account for more than 90 percent of retail in the country. But the majority of these neighbourhood Pop and Mom stores in Bangladesh have no digital presence.

ShopUp stands out as the premier full-service B2B commerce platform catering to small businesses in Bangladesh. Their professed goal is to use technology to supercharge businesses with easy access to B2B sourcing and last-mile logistics. They offer small businesses convenient access to B2B sourcing, last-mile logistics, digital credit, and business management solutions. 

Genesis of the Idea

Afeef Zaman serves as both the Founder and CEO of ShopUp. Once while visiting his grandparents’ home in Patuakhali, Zaman observed that there were potters producing traditional clay-made utensils, dolls, etc. but were unable to get the deserved price that their expertise and hard work demanded. He saw that those small unorganised enterprises struggled because of their lack of proper customer access and their inability to distribute products as affordably as big firms.

That experience induced Zaman to do something for these porters which would also contribute to preserving Bangladesh’s traditional crafts and help their enterprises to survive competition from big players. He wanted those porters to have a nationwide reach of their products and thereby improve their earnings. Zaman then contacted some of his friends and shared the idea of bringing small businesses under an online platform. ShopUp sprouted into a reality from that idea.

Commerce, Logistics and Financing 

ShopUp has three services within its ambit, which are Mokam, REDX, and Onkur. Mokam is ShopUp’s B2B commerce platform. which serves small neighbourhood shops; providing access to a wide range of products – all available at the tap of a button. Through Mokam one can source more than 10,000 products for one’s retail business.

REDX is ShopUp’s logistics service. It supercharges SMEs and large enterprises alike with the wide last-mile logistics network in Bangladesh. Onkur is ShopUp’s financing platform. It aims to make relevant fintech solutions accessible for CMSMEs (cottage, micro, small and medium enterprises) and agri-businesses.

Funded for Growth 

In 2021, ShopUp raised a whopping 75 million USD in Series B financing round, which was led by Peter Thiel’s Valar Ventures. Prosus Ventures, and existing investors Flourish Ventures, Sequoia Capital India, and VEON Ventures, also invested in the round. The proceeds were expected to be used to build best-in-class infrastructure, expand categories and launch new financial products to help meet the needs of underserved small retailers in Bangladesh.

 That funding followed the company’s Series A funding in October 2020, in which VEON participated as ShopUp’s first strategic corporate investor.

In February 2023, ShopUp announced a major milestone in securing $30 million in debt financing. The funds were expected to be used to drive expansion efforts and strengthen the company’s supply chain operations, leading to benefiting small businesses and consumers across the country.

The $30 million financing round was comprised of $20 million from Lendable, a technology enabled investment and alternatives platform that focuses on global impact alternatives, marking their first investment in South Asia. Additionally, ShopUp secured BDT equivalent of $10 million in debt financing from The City Bank, a first for a local startup. The City Bank is a major commercial bank in Bangladesh.

With over $200 million in investments from global investors already raised, the recent debt financing of $30 million was expected to be channelised appropriately to enable ShopUp to further its efforts in building critical supply chain infrastructure, in partnering closely with mills and manufacturers, and expanding its financial services products to support underserved SMEs in the food value chain. This fresh injection of funds was also expected to help address the significant food waste issue in Bangladesh (where over 30 percent of production goes to waste), by implementing a seamless distribution system that reaches 50 percent of the country’s population.

“The new debt facilities will help us reach our goal of creating a seamless distribution network for food and essentials that serves 80 million people in Bangladesh,” says Afeef Zaman, CEO, and Founder of ShopUp. “Our recent success in securing financing is a reflection of our financial stability and our efforts towards having a positive impact in Bangladesh,” he added further.

According to Crunchbase, till now ShopUp has raised funding in over 10 rounds. Their latest funding was raised on 2nd February 2023 from a debt financing round. ShopUp has been funded by 14 investors till now. The City Bank and Lendable are its most recent investors. In June 2020, ShopUp had acquired Voonik.

In 2020, ShopUp entered the Indian market through merging with the B2B business and tech platform of Sequoia-backed Voonik Technologies.

Following the merger, Voonik’s Founders Sujayath Ali and Navaneetha Krishnan joined ShopUp as Founders.

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