ShopUp, a commerce platform, has raised $75 million in Bangladesh’s largest funding round. This marks a significant milestone for the ecommerce startup, which is at the forefront of digital transformation in Bangladesh. The world’s leading venture capital firm, Sequoia Capital led the funding round.
This will help ShopUp expand its operations, build new features, and strengthen its network. It could also pave the way for Bangladesh to become a major global commerce platform in the years to come.
Commerce platform ShopUp raises $75 million in Bangladesh’s largest funding
ShopUp is an eCommerce platform in Bangladesh that enables users to shop online from small and medium-sized businesses. It was founded in 2018 by Sheikh Mohammed Rasel, Raisa Hedayetullah, and Syed Ahsan Ali in Dhaka.
The platform offers a comprehensive marketplace for online shoppers, with a wide selection of products from local sellers spread across various categories including Electronics, Fashion & Accessories, Home & Living, Health & Beauty and Toys & Games. In addition, ShopUp also provides access to ancillary services such as Courier Delivery and Payment Gateway services, within Bangladesh.
ShopUp has received an investment of 75 million dollars in 2019. The round was led by Singapore-based Bertelsmann Asia Investments (BAI) along with participation from existing investors including Delta Partners Capital LLP and Eight Roads Ventures India, the proprietary investment arm of Fidelity International Limited (Fidelity). This marks Bangladesh’s largest funding round ever. This year also saw ShopUp enter into strategic partnerships with banks, financial institutions, and telecom companies to drive customer acquisition, further strengthening their foothold in the market.
Overview of Bangladesh’s e-commerce market
Bangladesh has experienced sizable growth in the e-commerce sector over the past decade. According to a report from SampleSize, the country’s e-commerce market was estimated to have generated $1.7 billion in gross merchandise value (GMV) in 2019 with an average annual growth rate of 32.3 percent since 2010. The rise in smartphone and internet penetration in Bangladesh has allowed for a shift from traditional shopping patterns towards digital commerce, resulting in more consumers gravitating towards online marketplaces for their purchases. Online shopping is particularly popular among millennials and Gen Z, representing major spending power in the country, comprising 60 percent of all online shoppers.
Despite this uptick in interest and growth, Bangladesh’s e-commerce sector makes up a mere 0.5 percent of total retail sales compared to 5 percent globally due to a lack of trust or familiarity with online shopping platforms as well as doubts about quality and authenticity of products sold on these sites. To combat this issue, large ‘super apps’ such as ShopUp have emerged which provide payment solutions within their platform while also offering free delivery services which have gained momentum due to its convenience as customers no longer need to exchange cash at delivery points that were previously commonplace before the emergence of ShopUp and similar companies. This has resulted in nearly USD 75 million raised by ShopUp through funding so far which places it among Bangladesh’s largest fundraisers yet for any startup industry accelerator program currently operating there today making it an integral component of the further liberalisation and future growth opportunities for businesses operating within its borders specifically for its sectors related to digital commerce & technology research advancement initiatives which will prove beneficial even further upon combining with sensible government policies that might follow from interventions/ regulatory actions taken by its authorities with rise trends respectively showcased since inception leading to realisation potential gains heretofore seen until now.
Recently, commerce platform ShopUp raised $75 million in Bangladesh’s largest funding round. This investment catapults the company to a new level and will bring new opportunities and resources to their already successful business. In addition, the ShopUp funding will support the expansion and growth of the company and pave the way for improved services and offerings for their customers.
Now, let’s take a closer look at what this new funding will bring to ShopUp:
Overview of the $75 million funding round
In the largest funding round ever raised in Bangladesh, ShopUp, a pioneering fintech and e-commerce platform, has announced it has secured $75 million through a combination of debt and equity. The secured amount was raised with the collaboration between various financial firms such as Chiratae Ventures, Frontier Digital Ventures and WIndrose Capital.
The success of securing this large funding reflects the confidence placed in ShopUp’s original vision of helping small businesses get access to digital technologies and easier payment options. This would enable them to expand their services by scaling up their merchant network while offering an array of innovative products to accelerate their business growth.
ShopUp will utilise this funding to develop its mission to empower micro-merchants through numerous digital tools such as introducing easy financing plans for small business owners; launching its logistics platform with specialised delivery fleets for faster shipping; and providing lower cost donations for its merchants via generous cashback schemes etc. In addition, this new capital will help ShopUp connect each merchant and consumer across Bangladesh.
Furthermore, ShopUp aims to build an end-to-end marketing ecosystem for small business owners to concentrate on their core operations without having any worries about technology or finance management hurdles arising from being short on capital or resources.
Details of the investors involved
ShopUp, an online marketplace and mobile payment app, has recently announced its successful raise of $75 million in Bangladesh’s largest funding. The investors contributing to ShopUp’s latest funding round include a mix of venture capitalists and strategic investors.
The venture capital firms invested in the funding round include Circle Partners, Hummingbird Capital, Air Street Capital and TroisFinance. Strategic investors who bought into ShopUp’s success include Quokka Ventures, Approtate, Jasmine Partner Europe and Vega Group.
These investments collectively make up one of the largest series C investments ever raised by a Bangladesh startup. This latest funding will be diverted towards strengthening customer loyalty and expanding merchant services within the ShopUp platform, which currently serves as Bangladesh’s largest ecommerce enabler, with over 100 thousand active merchants on board.
Furthermore, these new funds will also be used to assist with different product launches from ShopUp that introduce innovative ways to grow their merchants’ businesses further, alongside improvements towards customer service quality delivery for an optimal consumer experience in mind.
Impact of the funding round on ShopUp
The most recent funding round of over $75 million received by ShopUp is a major milestone for the company. The investment brings total funding to over $112 million and will help to advance its e-commerce platform in Bangladesh. As such, this series C round was led by Iterative and Venturra Capital, with participation from Prosus Ventures, Global Founders Capital & Y Combinator.
Moreover, the investments will certainly positively impact on the growth of ShopUp in Bangladesh. This additional capital will be used to expand across rural areas and strengthen its position as an innovative mobile-first commerce platform. It will also allow ShopUp to accelerate digital transformation – transforming local retailers in leaving an impact on their communities across Bangladesh. In addition, the company aims to introduce new user experiences and services that create more opportunities for small online businesses.
To further drive digital payment adoption and financial inclusion in underserved parts of the country, ShopUp will focus on building its integrated payments platform. Additionally, this new influx of capital is expected to fuel growth in other initiatives such as:
- Marketplace infrastructure
- Expanded product offerings
- Customer acquisition programs
- Initiatives that give rise empowering retailers with data-driven insights into customer behaviour which can inform better decision making into running their businesses successfully
Bangladesh’s E-commerce Market
Bangladesh’s digital and e-commerce market is gaining momentum and ShopUp’s recent funding of $75 million shows its growth potential. This funding round is the largest for any commerce platform in Bangladesh and signals the country’s increasing appetite for digital products and services.
This article will explore the opportunity for growth in Bangladesh’s digital and e-commerce market and the strategies ShopUp is using to capitalise on this potential.
Overview of the market
Bangladesh’s e-commerce market is currently experiencing growth further fuelled by the easing of bureaucratic red tape, increased access to payment mechanisms such as Bikas, and technological changes. An in-depth analysis of Bangladesh’s e-commerce market reveals valuable insights into the characteristics of the market, its key players and their offerings, government regulations and policies that shape the industry, and opportunities and challenges in key sectors.
Given the current trends in technology development, it is predicted that Bangladesh’s e-commerce sector will continue to evolve rapidly over the coming years. Currently, the country has several strong players in the retail sector with major e-commerce platforms such as Daraz Bangladesh providing a wide range of products at competitive prices. However, as relatively low barriers to entry remain for new entrants into Bangladesh’s online retail space, market competition has increased greatly as customers have more choices regarding digital purchase options. Additionally, mobile commerce (mCommerce) has been on an upward trajectory in recent years with a significant portion of customers now opting for payment through mobile money services such as Bikas or Sure Cash.
The Bangladeshi government has also initiated various measures aimed at increasing access to markets within its borders while at the same time encouraging domestic production through incentives like tax breaks for businesses involved in digital commerce activities. Additionally, efforts are underway to improve infrastructure connectivity throughout the nation to better facilitate domestically and internationally trade.
Despite this progress, there are also considerable issues stemming from inadequate investment protection laws and counterfeit products being sold online, which present big risks for both buyers and sellers alike.
Overall, Bangladesh’s e-commerce sector provides a huge potential growth opportunity due to its large population base coupled with improving economic conditions across much of South Asia; however, considerable obstacles remain preventing accelerated transformation from occurring quickly or easily within this sector. Nevertheless, with careful government oversight and catalysts for change such as increased payment security protocols and streamlined logistics networks, Bangladesh could become an essential part of future global digital consumption patterns very soon!
Challenges faced by the market
The e-commerce market in Bangladesh is experiencing rapid growth, but the potential of this industry to significantly contribute to the country’s economy is largely constrained due to several challenges. These include inadequate infrastructure, unreliable logistics, limited access to financing and the comparatively small scale of online buyers compared to offline consumers.
One of the major constraints for e-commerce activity in Bangladesh is inadequate infrastructure. Internet penetration is still low at around 20%, which limits the number of prospective buyers who can access online platforms. Additionally, e-commerce companies still struggle with unreliable deliveries and pickups, often impacting customer satisfaction and willingness to purchase goods online.
Access to financing represents another challenge for e-commerce entrepreneurs and customers in Bangladesh. Many potential buyers tend to have low access or unwillingness when using credit card payments on digital platforms, leaving them reliant on cash-on delivery as their primary option for shopping online. At the same time, individuals trying to set up an e-commerce business often struggle with a shortage of funds or poor credit quality that prevents them from securing financial assistance from traditional banking sources or venture capital firms.
Lastly, while Bangladeshi consumers are increasingly embracing e-commerce platforms as part of their purchasing decisions, millions spending thousands each year on digital products alone, this number is still small compared with offline shoppers, so growth opportunities remain untapped. To foster further demand for these services more targeted promotions need to be provided that show how convenient and hassle-free shopping can be done online compared to its traditional counterpart and more actively engage those not currently aware that such options exist.
Opportunities for ShopUp
Bangladesh’s e-commerce market is estimated to be worth over $2.2 billion and is projected to grow at a CAGR of 46.8% through 2025, making it one of the fastest-growing markets in South Asia. With its new investment, ShopUp stands poised to capitalise on this enormous growth potential.
In particular, ShopUp offers unique advantages that should make it well-positioned in the Bangladeshi market: its presence in 32 cities across six districts nationwide (which would have been nearly impossible before the digital revolution), its anti-fraud technology, and unparalleled customer service offerings like same-day delivery. This puts it in a much better position than competitors who may only operate in certain corners of Bangladesh.
ShopUp will also benefit from Bangladesh’s increasing internet penetration and smartphone users. Both factors are essential for any eCommerce business to succeed as customers must be familiar with the product category, trust the platform and complete transactions securely. Additionally, ShopUp provides a platform for new entrepreneurs to start their businesses by selling their products without needing an initial capital investment or other resources that traditional shopkeepers need such as rent or labour costs. This further encourages financial inclusion for individuals and families across all income levels throughout Bangladesh. Finally, its comprehensive logistical network including courier partners across all 32 cities enables ShopUp to offer next day or even same day deliveries. As a result, it has become a key differentiator against competitive markets such as India or Pakistan where fulfilment times are often slower due to a lack of ground infrastructure.
Overall these business advantages should secure ShopUp’s position as an industry leader in the Bangladeshi eCommerce space over the coming years and allow them to leverage their $75 million investments into even greater success.
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