ShopUp, a business-to-business (B2B) company, announced yesterday that it had obtained $30 million in debt funding from domestic and international lenders. According to the corporation, the cash will accelerate expansion initiatives and expand the company’s supply chain operations, benefiting small companies and consumers across the country. Lendable, a worldwide debt financing provider for fintech startups in emerging regions, provided $20 million in funding, marking their first investment in South Asia. The remainder was obtained from City Bank in taka, the local currency.
The news comes when global investment in local companies declines due to global economic uncertainty. “Normally, foreign venture capital firms invest in Bangladeshi startups, but loan financing for a local startup is a first. So, I believe that is a good thing for Bangladesh.” bdjobs.com CEO Fahim Mashroor stated. “Furthermore, this is the first time a bank has made a large loan to a startup. It is, therefore, a significant achievement, “he stated.
The only risk is that if the taka depreciates further in the future, the company will have difficulty repaying the loans, he noted. Debt financing is finance provided to companies for a particular time by any lender, including banks. It works similarly to a typical loan in that a company borrows money and repays it with interest. Meanwhile, startup investments are made by venture capital firms, who seek an ownership stake in the company in the form of shares. Although ShopUp has already received over $200 million in investment from global investors, a company obtaining a loan indicates needing help attracting large sums recently, according to an industry insider who requested anonymity.
According to Afeef Zaman, CEO and creator of ShopUp, “the new loan facilities will help us achieve our aim of developing a seamless distribution network for food and necessities that services 80 million people in Bangladesh.” “Our recent success in acquiring finance reflects our financial stability and attempts to have a positive impact in Bangladesh,” he stated.
Mokam, ShopUp’s commerce platform, collaborates with manufacturers, brands, and mills to improve the distribution of food and home goods among small businesses. Mokam’s network of companies currently provides food and commodities to 20 million people in Bangladesh.
The organization runs REDX, a last-mile logistics network in Bangladesh and it is dedicated to filling gaps in the country’s food supply chain infrastructure.
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