ShopUp, a full-stack B2B commerce platform for small and medium businesses in Bangladesh, has secured $30 million in debt financing. Lendable, a London-based global provider of debt to fintech companies in emerging markets, provided $20 million of the financing.
The deal marks Lendable’s first investment in South Asia. Debt financing is when a company borrows money and pays it back with interest. The primary advantage of debit financing is that the lender has no ownership stake in the company, unlike equity financing in which a company sells a portion of its business to investors in return for working capital.
ShopUp will use the new round of financing to build supply chain infrastructure, partnering with mills and manufacturers, and expanding its financial services products to support underserved small and medium businesses in the food value chain. The funds will also be used to help address food waste in Bangladesh.
Currently, more than 30% of food production in Bangladesh goes to waste, according to ShopUp. ShopUp plans to implement a seamless distribution system that reaches 50% of the population, ensuring food security for all.
ShopUp’s commerce platform, called Mokam, is used by manufacturers, brands, and mills to streamline the distribution of food and household necessities to small and mid-sized merchants. Currently, 20 million people in Bangladesh access food and essentials through Mokam’s merchant network.
In addition, ShopUp operates the largest last-mile logistics network in Bangladesh, REDX, and is committed to addressing gaps in the country’s food supply chain infrastructure. “The new debt facilities will help us reach our goal of creating a seamless distribution network for food and essentials that serves 80 million people in Bangladesh,” says ShopUp chief executive and founder Afeef Zaman. “Our recent success in securing financing is a reflection of our financial stability and our efforts towards having a positive impact in Bangladesh.”
Lendable says it will continue to work closely with ShopUp to provide access to additional debt capital as ShopUp executes its growth strategy. “We have been impressed by the scale of business and quality of 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 micro, small and medium enterprises in Bangladesh,” says Hani Ibrahim, chief investment officer for Lendable.