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Mike Aquino · · 8 min readWhy Bangladesh’s rising star has big-name VCs hooked
When South Asia’s largest B series funding round for a business-to-business (B2B) ecommerce startup takes place in a country that’s still on the United Nations’ list of least developed countries, even the most jaded observers snap to attention.
In September, Bangladesh-based ShopUp landed US$75 million in an oversubscribed series B round that was joined by Peter Thiel’s Valar Ventures as well as Flourish Ventures and Sequoia Capital India, among others.
ShopUp provides mobile-based retail services to 500,000 of Bangladesh’s mudir dokan, or mom and pop stores, which generally suffer from inefficient sourcing, fragmented logistics, and lack of access to financial services. Microretailers in many other countries, including Indonesia, India, and the Philippines, face the same problems.
Photo credit: ShopUp
Only ten months earlier, ShopUp raised US$22.5 million from a Series A round. With a total funding of over US$100 million to date, ShopUp is possibly Bangladesh’s best-funded startup.
ShopUp claims to be the leading provider of B2B ecommerce and buy now, pay later (BNPL) services in the country, and may be in prime position to become the centerpiece of Bangladeshi ecommerce.
The firm is building out a large logistics network and claims to be handling more than half the country’s ecommerce volume already.
Still, it’s early days for Bangladesh’s ecommerce scene, which suffers from high logistics costs and a lack of digital payment options. As the industry grows, ShopUp hopes to turn its first-mover advantage into a lasting one.
A rising star?
The massive funding ShopUp has bagged is hardly surprising in light of Bangladesh’s quiet but steady economic rise.
The country is the 37th-largest economy in the world and second-best-performing in South Asia – its gross domestic product (GDP) grew at a record 8.2% in 2018-2019.
Over the past year, the nation has also experienced a post-Covid recovery, driven by garment exports and remittances from expatriate workers.
The number of mobile internet users in Bangladesh has also grown during this period. With 176.9 million mobile users and 123.7 million internet users as of July 2021, the country is “the fifth-largest mobile user base in Asia, and the ninth-largest globally,” Afeef Zaman, ShopUp co-founder & chief executive officer, tells Tech in Asia.
These outward signs of increasing prosperity, enabled by continued political stability and sustainable economic policies, have benefited Bangladesh’s entrepreneurs.
See also: Could Bangladesh be the next Indonesia?
Killing three birds with one stone
Starting a virtuous cycle
Opportunities outweigh risks in frontier markets?
Limits of a cash-based economy
Funneling funding into rapid growth
Banking on Bangladesh’s continuing growth
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ShopUp – perhaps the country’s most well-funded startup – is poised to become a dominant force in Bangladesh’s ecommerce industry.
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