Bangalore: India’s B2B e-commerce startup ShopX has raised $35 million in a new round of funding from Fung Strategic Holdings Limited (FSH). The Fung Group is headquartered in Hong Kong and operates across the entire global supply chain for consumer goods including sourcing, logistics, distribution and retail.
Founded by Amit Sharma and Apoorva Jois in 2015, Bangalore-based ShopX is expanding e-commerce to “India II” by connecting brands and suppliers with small merchants and consumers through a digitally managed retail platform. This platform enables small merchants (and their customers) to purchase various products and services from manufacturers/brands. ShopX is transforming small local merchants into economic digital hubs powered by an integrated technology platform.
There are 12 million small merchants in India who constitute about 90% of the Indian consumption economy of $700 billion. In comparison, e-commerce currently represents about 2% of the consumption space while Large Format Retail (LFR) (or Big Box Stores) and Modern Trade (such as supermarkets and hypermarkets) represents about 7.5%, leaving over 90% of retail in India to small merchants across the country.
ShopX adopts an inclusive, ecosystem partnership approach in the rapidly emerging omnichannel/digital offline space. On the demand side, it works closely with retailers and traders to digitally enable them instead of negatively disrupting them. On the supply side, it partners strategically with leading brands and manufacturers to digitise their value chains and distribution systems. A suite of technology products enables the seamless integration of these demand and supply side partnerships.
Nandan Nilekani, leading entrepreneur and investor, backed ShopX from its early days with a personal investment of more than $18 million in addition to providing business mentorship to ShopX founders.
“We are keen on building a globally transformative company out of India, and one with a deep product and technology-led culture. Having the right investors in an ambitious venture like ShopX is paramount. Nilekani has helped us not only with capital but also significantly enhanced our vision with his strategic guidance and helped instill sound operating values. We could not have asked for more in an early stage investor. As we plan for hyper-growth, we are extremely excited to have a global supply chain leader like the Fung Group as our strategic investor. We expect deep synergies in the areas of supply chain orchestration, global sourcing, introduction to new brands and overall retail distribution,” said Amit Sharma.
According to Nilekani, the ShopX model provides small retailers the same cutting-edge technology and supply chain solutions that any established ecommerce or organized retailer has access to. This provides an onboarding ramp into the formal economy for millions of retailers and the next 400 million consumers. “ShopX has been built on scalable and sound business principles like platform thinking, capital efficiency and a sustainable growth model. We are very excited to welcome the Fung Group into ShopX, and look forward to expanding the platform with their investment and strategic synergies,” said Nilekani.
“It’s an exciting time in the industry and our investment in ShopX comes on the heels of a series of investments that Fung Group have made in new, disruptive technologies that are transforming supply chain and retail,” said Rajesh Ranavat, Executive Director – Fung Strategic Holdings. “ShopX has a huge opportunity to transform India’s current retail landscape and be a real pioneer in terms of creating the future of what’s possible for the retail ecosystem in India from the consumer to the supplier, retailer or brand. We’re proud to be their strategic partner and we’re very excited at the potential growth ahead.”
ShopX has grown rapidly in a short span of time, covering 50,000 retailers across 300 towns and doing over Rs 500 crore in annualized transaction volume. ShopX’s technology platform is already built to support billion-dollar scale. Small merchants as well as brands and manufacturers have adopted the ShopX model in tremendous numbers, and the company today works with leading brands across the FMCG and mobile categories.
Following this funding round, ShopX plans to expand to lakhs of small merchants, strengthen its product and technology and build new offerings covering multiple product verticals.