Impact investment firm Omidyar Network has led a US$1.62 million investment in Dhaka-based fintech startup ShopUp, the latter announced on Monday.
The seed funding round was joined by angel investors from Facebook, Google, Amazon, Grab and leading global banks. The financing also includes a grant from UK AID.
ShopUp helps micro, small and medium enterprises in Bangladesh get access to microloans by automating the online sales and credit assessment process via Facebook and other social platforms. Registered merchants are eligible to apply for a collateral-free loan via ShopUp’s mobile app.
ShopUp said it plans to use the capital to enhance its credit algorithm, accelerate acquisition to 100,000 merchants, and establish partnerships with e-commerce players, logistics companies, and offline aggregators.
“There is a long tail of micro- and nano-enterprises with annual turnover of less than $20,000 who generally don’t have access to affordable credit due to high operating cost micro-loans. Our unique model allows us to reach, engage and assess these MSMEs at a fraction of the cost using deep analytics and algorithm-driven models,” said ShopUp co-founder and CEO Afeef Zaman.
With a population of 166 million, about half of the population are internet subscribers in the country, having about 350,000 shops on Facebook and 300 e-commerce portals.
ShopUp is a graduate of the third cohort of Telstra-backed accelerator muru-D. It claims to have 28,000 micro, small and medium enterprises (MSMEs) on its platform, the majority of which are led by female entrepreneurs.
“Access to flexible, affordable credit is the key to unlock growth in the MSME sector in emerging markets, and ShopUp’s mobile-friendly platform is helping to drive economic development, innovation, and employment in Bangladesh,” said Smita Aggarwal, Investments director at Omidyar Network.
Omidyar Network was established in 2004 by Pierre Omidyar, the founder of eBay and his wife Pam. It has committed over $1.3 billion to for-profit and non-profit organizations engaged in initiatives such as financial inclusion, digital identity, education and emerging tech.
Source: https://www.dealstreetasia.com/stories/omidyar-bangladesh-shopup-110954/