ShopX plans expansion with $35 mn fund from from Fung

B2B startup, ShopX which facilitates retailers and kirana store owners in small towns with FMCG brands, has secured $35 million from Fung Strategic Holdings to fuel its expansion plans.

According to the company, the funds will be used to strengthen ShopX’s products and engineering teams. The company also plans to strengthen its FMCG offerings and credit services. “We believe that credit is a game-changer in this industry,” said Amit Sharma, cofounder of ShopX, which launched its credit vertical ‘Suvidha’ more than six months ago. “While we will not be providing credit directly, we will do so through NBFCs and invest heavily in this vertical.”

In the past transactions, ShopX had raised $2 million from its early investor, Nandan Nilekani.

According to Sharma, ShopX has partnered with over 100 consumer brands, including Hindustan Unilever and P&G, and it has been approached by 200 more brands for partnership on the supply side. Fung Group operates across the entire global supply chain for consumer goods including sourcing, logistics, distribution and retail. “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,” said Rajesh Ranavat, executive director of Fung Strategic Holdings.

ShopX competes with the likes of Lightspeed Ventures-backed Udaan and Kalaari Capitalbacked Jumbotail, among others. In February, Udaan had raised $50 million in Series-B financing led by Lightspeed Venture Partners, Lightspeed India and DST Global founder Yuri Milner’s personal investment vehicle Apoletto, making it one of the biggest funding rounds at an early stage in the Indian startup ecosystem.

B2B ecommerce companies have been attracting investor attention over the years, with companies like Udaan and Just Buy Live being among the top funded B2B ecommerce firms in the country. The Indian B2B retail industry is estimated at over $100 billion, and with negligible online penetration, it offers good opportunity for players.

According to RedSeer Consulting, there are about 48 million offline retailers in India at present. On the other hand, the tally of B2B ecommerce companies adds up to a little over 550, spread across consumer goods, industrial goods, home and construction, and agriculture, among other sectors, as per data-tracking platform Tracxn.

According to Sharma, ShopX has seen 20% month-on-month growth over the last few months and expects this growth rate to rise to 25% in the coming months. The company has also turned profitable at the category-level. “Among our core categories, consumer electronics turned profitable in February and food & grocery became profitable starting June,” said Sharma.