In the past decade, a lot has changed around us. Bangladesh has experienced tremendous economic growth, the Internet is now accessible almost everywhere in the country, startups are on the rise, and thousands of jobs have been created. However, the small grocery store owner of your locality is still operating at the same scale as it was 10 years ago. While most companies and even startups cater only to the everyday problems of general consumers, ShopUp thought of solving the long-standing challenges of the small stores. There are 4.5 million mom-and-pop shops in the neighbourhoods of Bangladesh, and these stores alone account for 98 per cent of the retail economy. However, these small businesses do not see much growth, nor can they expand beyond that one small store. ShopUp is on a mission to not only empower these micro retailers but also to make life easier for the end consumers of these businesses.
Mokam, REDX, Baki - the Iron Triangle of ShopUp: Jack Ma, the co-founder of Chinese e-commerce giant Alibaba, attributes the success of the Alibaba group to three types of supporting companies that form an Iron Triangle. These are e-commerce companies - Taobao and Tmall, logistics company - Cainiao and finance company - Alipay. Following a similar approach, ShopUp has set up Mokam, REDX and Baki. Mokam is a B2B (Business-to-business) commerce platform that provides small neighbourhood shops with its supplies on demand. REDX is one of the largest logistics companies in Bangladesh providing last-mile deliveries for SMEs, and even large enterprises. Baki is a digital financing product embedded in Mokam that lets its users purchase products on credit, helping them close the financing gap. This unique model makes ShopUp a full stack B2B platform that helps small business owners easily run and grow their businesses despite everyday challenges and uncertainty.
ShopUp's impact on small businesses: Rabita (anonymous), the owner of an online boutique store, suffered badly when the lockdown started back in 2020. But Redx was still operating at full force despite the pandemic. "Redx not only helped my business stay afloat in such a tough time but also helped me expand the business with nationwide coverage," said Rabita. Karim (anonymous) runs a small grocery store in a small town in Khulna. He is not just the owner but the manager, salesperson, and accountant of his store. As such, on days he has to go for source products, the store remains closed resulting in lost sales. "Previously, I had to source products from more than 10 different vendors. But now Mokam delivers everything at my store," states Karim with satisfaction and relief.
Even on days, Karim's store is short on cash to purchase all the products needed to maintain the stock, Baki provides supplies on credit.
"At ShopUp, we put our merchants first. When we design our products, we think about the retailer's perspective and always try to find ways of simplifying their operations," said Ziaul Haque, the chief of staff of ShopUp. This is how ShopUp is enabling the thousands of micro retailers like Karim and small business owners like Rabita to reach their full potential.
The growth trajectory of ShopUp: ShopUp aims to reach every corner store in all of Bangladesh. Mr Haque explains the vision of Mokam saying, "Currently, our services are available at almost all the districts of the country except the Hill Tracts. In the near future, we want to reach every thana-level retailer. Our long-term vision is to onboard all the retail shops of each and every village and town in Bangladesh."
In 2020-21, ShopUp's revenue growth has been 13 times along with 11 times growth in the number of total shipments. Afeef Zaman, the CEO and co-founder of ShopUp, deeply cares about the retailers and thinks about ways to end their struggles. He said, "Our mission is to put the 4.5 million small retailers in the driving seat of Bangladesh's economic growth. We want to meet the unarticulated needs of the retailers we serve." ShopUp is creating a product that is scalable and brings convenience to the lives of these retailers. "We are building best-in-class technology and the infrastructure required to support retail operations all over the country," Mr Zaman added.
Big dreams require big funds: Out of the 4.5 million retailers, ShopUp has already onboarded more than half a million of these stores. In recent times, ShopUp achieved some massive feats as they received the largest series B funding in all of South Asia as a B2B startup. In September 2021, the company was able to raise $75 million (nearly Tk 640 crore ) from Peter Thiel's Valar Ventures along with some other big names like Prosus Ventures. The existing investors from the Series A round- Flourish Ventures, Sequoia Capital India, and VEON Ventures, were also part of the investment. Following this successful round, ShopUp also received a series B extension round in January 2022 raising $34 million led by Tiger Global and others. With a staggering $109 million raised already in series B, ShopUp doesn't stop there. On June 27, 2022, ShopUp announced its series B4 extension round of another $65 million led by Valar Ventures. Regarding investment allocation, Afeef Zaman said, "We want to invest the money to strengthen retail logistics infrastructure, add more categories of products and solve even more problems of retailers via our platform."
All the rounds combined, ShopUp has raised more than $200 million to date, the highest any Bangladeshi startup has ever been funded. Despite such a huge investment, ShopUp wants to stay very frugal with its expenses. "Do more with less - is one of our core philosophies. Startups should be very careful in regards to their expenses and at ShopUp, we actively try to keep our costs as low as possible while maintaining growth and efficiency," said Ziaul Haque.
More than the money, what ShopUp achieved is the backing of investors like Peter Thiel, the co-founder of PayPal. Peter was also the first outside investor of Facebook. This series of investments not only provided ShopUp with the funding required to go big but also the validation that Bangladeshi Startups aren't just small dreams of these entrepreneurs anymore. Bangladeshi startups are growing at a pace that most investors previously thought impossible and the entrepreneurs only dreamt of. The possibilities are endless and startups like ShopUp just started.
The writer is a third-year BBA student at IBA, University of Dhaka.