Business-to-business ecommerce firm ShopX has raised $35 million in a new round of funding from Fung Strategic Holdings Ltd (FSH). ShopX, which connects brands and suppliers with small merchants and consumers through a digitally-managed retail platform, will use the funds to expand its network, strengthen its product technology and build new offerings covering multiple product verticals.
“We are keen on building a globally-transformative company out of India, and one with a deep product and technology-led culture. We expect deep synergies (with Fung Group) in the areas of supply chain orchestration, global sourcing, introduction to new brands and overall retail distribution,” ShopX’s co-founder Amit Sharma said in a statement. The Bengaluru-based firm was founded by Sharma and Apporva Jois in 2015. Infosys non-executive chairman Nandan Nilekani has backed ShopX from its early days with a personal investment of more than $18 million in addition to providing business mentorship to ShopX founders.
There are 12 million small merchants in India who constitute about 90% of the Indian consumption economy of $700 billion. In comparison, ecommerce currently represents about 2% of the consumption space while large format retail (or big box stores) and modern trade (such as supermarkets and hypermarkets) represent 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. 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.
Over the last three years, ShopX has grown rapidly covering 50,000 retailers across 300 towns and doing over Rs500 crore in annualized transaction volume. “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,” said Nilekani.
“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 FSH.
FSH is owned by Fung Investments, the private investment arm of the families of Dr Victor Fung and Dr William Fung, the controlling shareholders of the Fung Group, which is based in Hong Kong. The Fung Group runs sourcing, logistics, distribution and retail operations across the global supply chain for consumer goods.