Dropshop has increased INR 9.3 Crores in a Pre Series-A round led by Inflection Point Ventures, one of the India’s biggest angel investment space in India. Existing investors Chennai Angels & Axilor Ventures also participated in stage with 42.vc joining the round via AngelList. Increased funds will be used for strengthening the product and scaling up of operations for handling more of the FMCG brands and brings new markets like Hyderabad and Chennai.
Dropshop is a full-stack space for FMCG firms to digitise their last-mile distribution, logistics, sales, and credit to retailers. The brands get real-time visibility into supply gaps and demand, fulfilment ratio, and drive targeted growth. Dropshop has been able to demonstrate 30 to 100% high sales and fulfilment than traditional distributors for its FMCG consumers.
It has enabled simple credit for thousands of underserved retailers, who typically cannot avail credit due to lack of incomplete documentation & credit history, and have to rely on informal channels. In house credit decisioning models and low- KYC, they have enabled embedded credit of over Rs. 40 cr to more than 10000 retailers in Bangalore over the last fifteen months and are presently exploring partnerships with NBFCs & fintech players to enlarge this service to the small retailers.
Mitesh Shah the Co-Founder of Inflection Point Ventures says, “FMCG companies are often faced with a very serious issue of raising of margins without burdening their customers. Traditionally, they have adopted the approach of building last mile network and distribution in house. By the geography of India, it is not viable business to create expensive distribution network across the country. This is fully untapped opportunity which Dropshop has identified and they are working aggressively to scale up. This is an initial emerging area where we can expect more startups to enter making it an attractive sector to invest in.”
Jignesh Kenia the Lead Investor of IPV says that “For FMCG companies, setting up their own distribution network across the country will be an expensive affair and this is where Dropshop comes into play. With the help of technology, they are able to cover the 90% of the region compared to 60 – 70%, which is covered by Traditional Distributors. This helps in optimising distribution costs and increase Sales for their Customers. The idea of tapping into FMCG distribution and logistics segment got us interested in leading this round.”