Dropshop has raised INR 9.3 Cr in a Pre-Series A round led by Inflection Point Ventures, one of India’s largest angel investment platforms in India. Existing investors Axilor Ventures and The Chennai Angels also participated in the round with 42.vc joining the round via AngelList. Funds raised will be used for strengthening the product and scaling up of operations for handling more FMCG brands and entering new markets like Chennai and Hyderabad.
Dropshop is a full-stack platform for FMCG companies to digitise their last-mile distribution – sales, logistics and credit to retailers. With this, the brands get real-time visibility into demand and supply gaps, fulfilment ratio, and drive targeted growth. Dropshop has been able to demonstrate 30 per cent to 100 per cent high sales and fulfilment than traditional distributors for its FMCG customers. At the same time, it has enabled simple credit for thousands of underserved retailers who typically cannot avail formal credit due to lack of credit history and incomplete documentation, and have to rely on informal channels. With their in-house credit decisioning models and low KYC, they have enabled embedded credit of over Rs. 40 crore to more than 10,000 retailers in Bangalore over the last 15 months and are currently exploring partnerships with NBFCs and fintech players to expand this service to small retailers.
Mitesh Shah, Co-Founder, Inflection Point Ventures says, “FMCG companies are often faced with a critical issue of increasing margins without burdening their customers. Traditionally, they have adopted the approach of building distribution and last mile networks in house. Given the geography of India, it is not viable business wise to create an expensive distribution network across the country. This is a completely untapped opportunity which Dropshop has identified and they are working aggressively to scale up. This is a new emerging area where we expect more startups to enter, making it an attractive sector to invest in.”
Jignesh Kenia, Lead Investor, IPV stated, “For FMCG companies, setting up their own distribution network across the country could be an expensive affair and this is where Dropshop comes into play. With the help of technology, they are able to cover 90 per cent of the region compared to 60 per cent to 70 per cent which is covered by the Traditional Distributors. This helps in optimising distribution costs and increase in Sales for their customers. The whole idea of tapping into the FMCG distribution and logistics segment got us interested in leading this round.”
If you have an interesting article / experience / case study to share, please get in touch with us at editors@expresscomputeronline.com