ShopUp secures $30m debt financing to boost expansion, supply chain
ShopUp, the largest full-stack B2B commerce platform in Bangladesh, has declared a major milestone of securing $30 million in debt financing to ramp up expansion efforts and strengthen supply chain operations.
The fresh batch of $30 million financing comprises $20 million from Lendable, the global provider of debt to fintech companies in emerging markets, marking their first investment in South Asia.
In a display of another first-of-its-kind local lending to a startup, City Bank joined the debt funding with a local currency loan equivalent to $10 million.
"The new debt facilities will help us attain our goal of creating a seamless distribution network for food and essentials serving 80 million people in Bangladesh," said Afeef Zaman, CEO and founder of ShopUp.
"Our recent success in securing financing is a reflection of our financial stability and our efforts towards creating a positive impact in Bangladesh," he added.
The company, in a statement, noted that Bangladesh's retail market is highly fragmented, with 4.5 million small shops accounting for 98% of total consumption in the country. These small, scattered shops are responsible for distributing food and household items across the country. Even so, 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. Currently, 20 million people in Bangladesh access food and essentials through Mokam's network of shops.
The company operates one of the largest last-mile logistics networks in Bangladesh, REDX, and is committed to addressing gaps in the country's food supply chain infrastructure.
With over $200 million in cumulative investments from global investors already raised, the recent debt financing of $30 million will enable ShopUp to further its efforts in building a 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% of production going to waste, by implementing a seamless distribution system that reaches 50% of the population, ensuring food security for all.
"We have been impressed by the scale of business and quality of the 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 SMEs 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," he added.
Lendable is a leading debt finance provider to fintech companies across the frontier and emerging markets that create access to new financial products and services for unbanked and underbanked populations.
To date, Lendable has disbursed over $340m to various fintech companies in over 14 countries. Lendable finances fintech companies that facilitate consumer and SME credit, productive asset finance, payments, remittances, and digital marketplaces.
From its offices in Nairobi, London, and Singapore, and using its proprietary technology and data, Lendable directly originates, structures, underwrites and monitors all transactions.