Another startup focused on SMEs in Southeast Asia has announced a funding round. Dropee, a Malaysia-based B2B wholesale platform that also offers financial services, like working capital loans, to SMEs, said today it has closed a Series A round totaling $7 million. The Y Combinator alum raised $3 million in equity and $4 million in debt, led by returning investor Vynn Capital. Other participants included HCL Capital, Resolution Venture and LKF Capital, along with returning investors Brama One Ventures.
Operational in Malaysia, Singapore and Indonesia, Dropee plans to introduce new financing products for wholesalers and retailers over the next 12 months by working with strategic partners, including regional banks and non-banking financial institutions. It has now raised a total of $8.7 million.
Launched 5 years ago, Dropee focuses primarily on food and beverages and fast-moving consumer goods. The startup says it is used by over 80,000 SMEs, mainly small retail stores, to buy wholesale inventory through its marketplace, and now totals more than $100 million in annualized transaction value. Its marketplace is integrated with a SaaS e-commerce platform that automates payment collection, tracks orders and sales and manages offline-to-online orders.
Lennise Ng, CEO of Dropee, said the startup was created because she and one of her co-founders came “from family businesses that are involved in B2B trading on fast-moving consumer goods products for over two generations.” That gave them a close-up look at inefficiencies in the wholesale trading space across Southeast Asia. Dropee was created to make the process more efficient.
For example, the platform makes product recommendations through its AI-based smart catalog: each B2B consumer sees a personalized selection of best-selling goods, complementary products and campaigns based on their business needs. SMEs can also order directly from its wholesale marketplace or an assigned sales agent, allowing wholesalers real-time transparency and allowing orders to process more quickly.
Dropee began offering financial products in November 2020, including up to 60 days credit financing for invoices and supply chain. “It can be challenging for traditional wholesalers to extend longer credit terms to SMEs, especially during the pandemic,” Ng said. She added that credit financing for retailers helps increase the number of immediate inventory purchases. To gauge creditworthiness and loan terms, Dropee uses multiple variables captured through its platform, including an SME’s transaction data to lifetime value per business network.
The new round of financing will be used to expand Dropee’s supply chain financing, with plans to work with more brands and wholesalers across Southeast Asia to extend credit term payments for SME retailers.
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