Bengaluru-based one-stop distribution platform for FMCG brands Dropshop on Monday announced that it has raised Rs 9.3 crore in a pre-Series A round led by Inflection Point Ventures. Existing investors Axilor Ventures and The Chennai Angels also participated in the round, with 42.VC joining the round via AngelList.
According to the startup, these fundings will enable further strengthening of their product and scale-up operations for handling FMCG brands in a much better way. Moreover, with this funding, they can enter new markets like Hyderabad and Chennai.
Dropshop is a full-stack platform for FMCG companies to digitize their last-mile distribution, sales, logistics, and credit to retailers. It is founded by Udit Dhawan, Rohit Fernandes, and Ravi Teja, back in 2019.
The Founder and CEO, Udit Dhawan, while speaking about the fundraising event for Dropshop, said, “As one of the largest sectors in India, FMCG is still run over the backs of thousands of traditional distributors. We have been working with several large and small FMCG companies in streamlining their last-mile distribution with technology for over a year now and enabling them to reach their market potential.
“We believe that the time is ripe for FMCG distribution to consolidate and evolve into retail execution where all stakeholders benefit from data and technology. This round of funding will allow us to build over our existing products to grow our brand portfolio as well as retailer base.
“Our immediate focus is to strengthen our team, product, and processes for the next phase of growth, and we are delighted for the continued support of our existing investors and excited to have IP Ventures and 42.VC joining us on this journey. “
The Dropshop Network currently reaches more than 10,000 retailers in Bangalore alone. Out of the top 10 FMCG companies in India, Dropshop works with 5 of them. This list includes giants like ITC, Reckitt Benckiser, Marico, and Godrej Consumer Products and 40+ small and localized brands.
Sources from within the startup confirmed that Dropshop gets more than 15,000 orders per month with a revenue of Rs 4 crore GMV every month.
Commenting on the investment, Mitesh Shah, Co-Founder, Inflection Point Ventures stated, “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 that Dropshop has identified and they are working aggressively to scale up. This is a newly emerging area where we expect more startups to enter making it an attractive sector to invest in,” he added.
“With the help of technology, Dropshop can cover 90 percent of the region compared to 60 to 70 percent covered by the traditional distributors. This helps in optimizing distribution costs and increase sales for their customers. The whole idea of tapping into the FMCG distribution and logistics segment got us interested in leading this round,” said Jignesh Kenia, Lead Investor, IPV.
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