B2B startup ShopUp secures $30m debt financing
ShopUp, a fledgling B2B startup, recently stated that it secured $30 million in debt financing from a mix of local and international lenders. This influx of funds will assist the company in its expansion goals and bolster its supply chain operations, positively impacting small businesses and customers across the country.
Of the total funding, Lendable, a global provider of debt financing for fintech companies operating in emerging markets, invested $20 million, making it its initial investment in South Asia. The remaining funds were obtained from the City Bank in the local currency, taka.
This financing comes at a time when the world is witnessing a drop in investment towards local start-ups due to the global economic crisis. However, ShopUp’s success in obtaining these funds is a testament to its potential for growth and sustainability.
“The recent debt financing for a local startup in Bangladesh marks an important milestone, as it is the first time a bank has given a large loan to a startup,” said Fahim Mashroor, CEO of bdjobs.com. He sees this as a positive development for the country’s startup ecosystem. However, he admitted that the drop in the value of the taka currency could pose a challenge to start-up companies in repaying loans.
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Debt financing, unlike an initial investment from a venture capital firm, involves borrowing money from a lender, such as a bank, for a specified period. The startup must repay the loan, including interest. In contrast, venture capital firms provide financing in exchange for equity in the form of shares.
While ShopUp has secured more than $200 million in investment from global investors, the move toward debt financing suggests that the startup may have struggled to attract large amounts of investment lately, according to anonymous industry sources.
“The new debt facilities will help us achieve our goal of creating a seamless grocery and basic necessities distribution network serving 80 million people in Bangladesh,” said Afeef Zaman, CEO and Founder of ShopUp.
“Our recent success in securing funding reflects our financial stability and our efforts to have a positive impact on Bangladesh,” he said.
Mokam, ShopUp’s commerce platform, works with manufacturers, brands and mills to streamline the distribution of groceries and household items in small stores.
Currently, 20 million people in Bangladesh access groceries and essentials through Mokam’s store network.
The company operates REDX, a last-mile logistics network in Bangladesh, and is committed to filling gaps in the country’s food supply chain infrastructure.
“We are impressed with the size of the business and the quality of the team ShopUp has built to date,” said Hani Ibrahim, Lendable’s chief investment officer.
