ShopUp secures $30m debt financing to fuel expansion

ShopUp, the largest full-stack B2B commerce platform in Bangladesh, announced that it has secured $30 million in debt financing.

The company plans to use the investment to step up its expansion efforts and strengthen its supply chain operations, benefiting small businesses and consumers across the country, says a press release issued by ShopUp on Thursday.

According to LightCastle partner’s report titled “Bangladesh Startup Ecosystem: Funding Landscape”, the startups in Bangladesh received $103 million funding from both local and international fund in 2022.

Of the total, ShopUp alone received $63 million funding which was the highest in the year. It also received $75 million (the second highest after bKash) in 2021, $22.5 million in 2020 (highest) and $1.7 million in 2019.

Who are $30 investors?

Of the total $30 million, $20 million came from Lendable, the global provider of debt to fintech companies in emerging markets. This will be their first investment in South Asia.

The rest of BDT equivalent to $10 million in debt financing came from The City Bank, a leading commercial bank in Bangladesh.

What’s coming next?

With over $200 million in investment from global investors already raised, the recent debt financing of $30 million would enable ShopUp to strengthen its efforts in building critical supply chain infrastructure, partnering closely with mills and manufacturers, and expanding its financial services products to support underserved SMEs in the food value chain.

The funds will also help address the significant food waste issue in Bangladesh, with over 30 per cent of production going to waste, by implementing a seamless distribution system that reaches 50 per cent of the population, ensuring food security for all.

“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, Chief Executive Officer 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.

“We have been impressed by the scale of business and quality of team that ShopUp has built to date and are happy to be supporting the impactful work ShopUp has been doing in providing access to goods and capital to underserved MSMEs in Bangladesh,” said Hani Ibrahim, Chief Investment Officer of Lendable.

“We continue to work closely with ShopUp to facilitate additional debt capital into their business as they roll out their growth plan.”

What is ShopUp doing in the country?

Bangladesh’s retail market is highly fragmented, with 4.5 million small shops accounting for 98 per cent of the total consumption in the country.

These small and scattered shops are responsible for distributing food and household items across the country and they face issues such as product unavailability, unreliable delivery, and lack of access to affordable financing.

ShopUp’s commerce platform Mokam partners with manufacturers, brands, and mills to streamline the distribution of food and household necessities to small shops.

ShopUp claims that currently 20 million people in Bangladesh access food and essentials through Mokam’s network of shops. The company operates the largest last-mile logistics network in Bangladesh, REDX, and is committed to addressing gaps in the country’s food supply chain infrastructure.