ShopUp is a Bangladesh B2B digital commerce platform servicing micro and small entrepreneurs. The startup offers what it calls a full-stack of services that include a wholesale marketplace, warehousing and last-mile logistics, and working capital.
The company recently raised $22.5 million from foreign investors, co-led by Sequoia Capital India and Flourish Ventures. It plans to deploy the raised capital to strengthen its partnerships with manufacturers and expand its tech infrastructure. ShopUp has raised about $28 million to date from investors and merged with Indian ecommerce platform Voonik earlier in the year. The company has opened an office in India’s Bengaluru to hire tech talent.
ShopUp said it has seen a rise in demand amid COVID-19. Neighbourhood stores’ weekly transactions increased by 8.5x between April and August on the platform, and their RedX’s last-mile logistics team is processing 13x more daily parcel volume than it did in April.
Bangladesh retail environment
The Bangladesh retail environment is highly fragmented, and 95 percent of sales goes through neighbourhood stores. The country has 4.5 million mom-and-pop stores, and the vast majority of them have no digital presence.
Bangladeshi informal retailers are facing a number of challenges. Wholesalers that supply them often provide inconsistent service, and shops don’t receive products on time and frequently run out of stock. According to a UN Capital Development Fund report, 73% of all sales are on credit, and payments are made in cash instead of digital payments. This creates cash shortages, and most businesses are in need of working capital. Ecommerce is still in the early stages of development, and Amazon has yet to enter the country.
Image credit: ShopUp