ShopUp, a Bangladesh-based business-to-business (B2B) commerce startup, announced on Thursday that it has secured a $30-million debt financing from global debt provider Lendable and local lender The City Bank.
The funding, which marks a significant milestone for ShopUp and the entire startup ecosystem in Bangladesh, follows the company’s $65-million follow-on round in June 2022, anchored by Peter Thiel’s Valar Ventures.
The company had previously completed a $109-million Series B round, with participation from Valar Ventures, Tiger Global, Prosus Ventures, Flourish Ventures, Sequoia Capital, and Veon Ventures.
According to the announcement, Lendable provided $20 million of the total debt financing while The City Bank contributed $10 million. Lendable is a global provider of debt to fintech companies in emerging markets while The City Bank is a major commercial bank in Bangladesh.
ShopUp will use the fresh funds to drive expansion efforts and strengthen its supply chain operations.
“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,” said Afeef Zubaer Zaman, CEO and Founder of ShopUp.
Founded in Dhaka in 2016 by Zaman, Siffat Sarwar, and Ataur Rahim Chowdhury, ShopUp provides B2B sourcing, logistics, and financial services to micro, small and medium enterprises (MSMEs) through its mobile-first digital platform and last-mile logistics service RedX.
Its embedded financial services product provides these small shops access to digital credit through partnerships with local financial institutions.
ShopUp’s B2B commerce app, Mokam, also helps neighbourhood mom-and-pop shops by enabling access to the largest catalogue of products with 24-hour doorstep delivery — all within one single app.
Bangladesh is home to one of the most fragmented retail markets in Asia, with 98% of all retail consumption happening through 4.5 million small neighbourhood mom-and-pop retail shops spread out across the country, ShopUp said.
These shops face daily struggles when procuring goods from multiple suppliers, distributors, and wholesalers.
The funding comes as startups in Bangladesh raised a combined $109 million in venture funding in 2022, down 74% from the $415 million amassed in the previous year, according to the ‘Bangladesh Startup Investment Report 2022’ by LightCastle Partners.
ShopUp accounted for approximately 58% of the country’s total startup funding last year.