Bengaluru-based ShopX, a business-to-business e-commerce platform for small retailers, has raised $35 million (Rs 240 crore) in a fresh funding round from Hong Kong-based Fung Holdings, a company statement said.
The venture will use the funds primarily to invest in its product and technology verticals and to develop new offerings for small retailers, Amit Sharma, co-founder and chief executive, told VCCircle in a telephonic interaction.
“We will also use the same for geographical expansion as well as growth,” Sharma added.
Hong Kong-based Fung Holdings, founded in 1937, is the major shareholder of the Fung Group of companies, whose core businesses include trading, logistics, distribution and retailing, information on its website shows.
“This is an investor who fuels the supply chain of global brands that include Macy’s, Walmart, H&M and Adidas to name a few. They are someone who exactly understands what we do,” Sharma said.
This funding round would also mark the first time ShopX has raised capital from an investor other than Infosys co-founder and former UIDAI chairman Nandan Nilekani. Prior to this round, it raised a little over $19 million from Nilekani alone. As per media reports, the last funding infusion of $2 million by Nilekani was in April this year.
“The ShopX model provides small retailers the same cutting-edge technology and supply chain solutions that any established e-commerce or organised retailer has access to. This provides an onboarding ramp into the formal economy for millions of retailers and the next 400 million consumers,” Nilekani said in the statement.
Run by 10i Commerce Services Pvt. Ltd, ShopX was founded in 2014 by Sharma and Apoorva Jois, who had earlier founded Go Untucked, a startup in the fashion apparel segment.
The B2B venture helps local kirana store owners and small retailers conduct transactions on a single platform, namely an app. In effect, it helps small merchants become more than just general traders. ShopX operates primarily in three categories namely food and groceries, electronics and digital services.
Using ShopX’s retailer-facing app, a small merchant can offer his customers a range of services including making mobile phone and DTH recharges, booking travel tickets for customers, making bill payments and assisting e-commerce shoppers. ShopX also acts as a pick-up delivery point for such orders. The company plans to expand its services, including train ticket bookings, going forward.
Besides, the firm’s app connects the retailer directly with consumer brands, helping in direct sourcing of products and involves itself in last-mile fulfilment as well. ShopX has more than 50,000 retailers on its network and is currently present in 300 towns and cities.
Since January 2018, the number of transactions processed on the ShopX platform has doubled from Rs 20-25 crore to Rs 50 crore, thus translating into a nearly 20% month-on-month growth, Sharma added.
In an interaction with VCCircle in January this year, Sharma said the company was looking to achieve $1 billion gross merchandise volume within the next two years as well as to increase the number of retailers within the next 24 months. Eventually, the company hopes to expand to 1,000 cities and towns in the south and west and another 1,000 in the north and east.
ShopX has three revenue streams—a small, one-time fee whenever retailers sign up, a transactional margin on sales from consumer brands on their network, and revenues from marketing and brand building activities.
The company also recently introduced ShopX Suvidha, a platform which offers credit to retailers and consumers, with the focus on the former. The company has tied-up with non-banking finance companies for this.
Recent deals in the space
A number of e-commerce firms in the B2B segment have garnered investor interest in the past few months.
Last month, Bengaluru-based 63Ideas Infolabs Pvt. Ltd, which runs business-to-business agri-marketing platform Ninjacart, raised around $4.9 million (Rs 33.70 crore) in a fresh funding round from Accel Partners and Infosys co-founder Nandan Nilekani’s NRJN Trust.
In the same month, Lal10, an online marketplace that connects artisans and bulk buyers; fashion and lifestyle supply chain digitisation platform Wholesalebox; and online procurement portal for office supplies Kobster raised capital.
In June, Aahaa Stores, an online B2B store for office supplies, raised $2 million (around Rs 13.6 crore) in a fresh round of funding from UAE-based investment group Calega.
In May, Bizongo, a B2B marketplace for packaging materials, raised $22 million (Rs 146.7 crore) in a Series B round of funding from B Capital and International Finance Corporation (IFC) as well as existing investors Accel Partners and IDG Ventures.
In January, WOTU, a B2B e-commerce for food and beverages, raised an undisclosed amount in a pre-Series A round of funding from Claris Capital and Mumbai Angels Network.
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