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Dropshop, a platform for FMCG distribution, has secured Rs. 9.3 crore in a pre-Series A investment round headed by Inflection Point Ventures (IPV). The Bengaluru-based company is a full-stack platform that enables FMCG companies to digitize last-mile distribution, sales, logistics, and credit to retailers. The funds will be utilized to develop the product and expand the company’s operations.
Dropshop, an FMCG (fast-moving consumer goods) distribution platform, has announced that it has raised Rs. 9.3 crore (approx. $1.3 million) in a pre-Series A funding round led by Inflection Point Ventures (IPV). Other participants, including Axilor Ventures and The Chennai Angels, were among the existing investors in the round, with 42.vc entering via AngelList.
The funding will be utilized to improve the product and scale up operations to handle more FMCG brands and expand into new areas like Chennai and Hyderabad.
Bengaluru-based Dropshop is a full-stack platform allowing FMCG firms to digitize their last-mile distribution, sales, logistics, and credit to retailers. It was founded in May 2019 by Udit Dhawan, Rohit Fernandes, and Ravi Teja.
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.Mr. Dhawan, founder and CEO of Dropshop
He added that their immediate goal was to enhance their staff, product, and procedures in preparation for the next phase of growth. They are grateful for their existing investors’ continuing support and IPV and 42.vc joining them on this path.
Speaking about the investment, Mitesh Shah, co-founder of IPV, said that companies in the FMCG industry frequently confront the challenge of growing profitability without burdening their customers. Therefore, they have always taken the strategy of creating their distribution and last-mile network. However, given India’s vastness, establishing a costly distribution network is not a realistic business strategy.
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.Mitesh Shah, co-founder of IPV
With the help of technology, Dropshop is able to 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 in sales for their customers. The whole idea of tapping into the FMCG distribution and logistics segment got us interested in leading this round.Jignesh Kenia, lead investor at IPV
Dropshop Network now has over 10,000 shops in Bangalore. It collaborates with five of India’s top ten FMCG businesses, including ITC, Marico, Reckitt Benckiser, and Godrej Consumer Products, and more than 40 small and regional brands.