Dropee raises US$1.3mil extended seed round to help wholesale businesses digitise
By Karamjit Singh July 20, 2020
- Strong position to help businesses go digital, Singapore expansion by end 2020
- Averages 8k to 10k monthly purchase orders from over 12k retailers on platform
You can call it the Covid effect. In early March, Lennise Ng cofounder and CEO of Macro Tech Ventures Sdn Bhd, which owns and operates Dropee, the B2B e-commerce platform provider that focuses on brands, retailers and wholesalers, told DNA that they were closing in on a US$2 million range, funding round, on the heels of their Winter 2020 chohort graduation from Y combinatory in the Silicon Valley.
And today, Dropee announced raising a US$1.3 million (RM5.5 million) funding round it describes as a “seed-extension round”. Its earlier seed round of US$350,000 (RM1.5 million) was announced in Jan 2019.
The Covid effect here is not referring to the lower amount raised as Dropee is already working on its Series A round as well. Rather it refers to how Covid-19 has accelerated the urgency for businesses to accelerate their digital adoption, which plays into the services Dropee is offering.
With lockdowns and new procedures for operating in the post-lockdown Covid era, the wholesale sector is one of the industries heavily affected by the pandemic. Couple this with changing retail customers purchasing behavior, has exposed the inefficiency of the primarily offline methods such as pen-and-paper, fax, phone calls, and WhatsApp that retailers, mom-and-pop stores and wholesalers have been using.
With customers reducing their usual purchasing amount to opting for cheaper product alternatives, without using a system, wholesalers are finding it difficult to keep updated on their customers preferences. And this is where Dropee comes in to provide a solution for these wholesale businesses that re struggling in adapting in the next normal.
According to Lennise most of the fund will be utilised to help wholesale businesses transition their trading and procurement operations online. She also tells DNA that they are also planning towards their expansion into Singapore by year end. In Malaysia, Dropee which initially focused on the Klang Valley, Johor and Penang since its 2017 launch, has now expanded to offer its services nationwide.
“With the newly injected capital, we plan to fully assist and automate the onboarding process for these wholesale businesses. Oftentimes, the largest bottleneck when going-digital is the setting up process. That’s where wholesalers and brands create their digital catalog, upload thousands of SKUs online, and have their retail customers to order from their online stores. Our team has been working hard to improve that experience, with the ultimate goal for any wholesalers to go-digital seamlessly with us,” says Lennise.
The current round of investment is participated by a mix of new and existing investors such as Y Combinator, Ondine Capital, Vynn Capital (which led the early 2019 round), Brama One Ventures, Colopl Next, John Devor (COO of Touchpoint Games), Jason Tsai (Machine Learning Lead of GooglePay), and a number of other angel investors. Colopl Next is the corporate venture capital arm of Colopl, Inc, a leading Japanese gaming company which invests globally in a variety of internet businesses with the commitment to support innovative entrepreneurs.
[Paragraph updated with inclusion of investor Colopl Next which did not have the green light to disclose its investment at the time the article was first published.]
Victor Chua, founding and managing partner of Vynn Capital, highlighted “we believe that Dropee is in a fantastic long-term position to help economies to scale and go digital, especially to traditional businesses that have been suffering due to the lack of online presence. More than just a solution, Dropee is an effective partner to businesses that are looking to digital for survival and breakthrough. This is in line with our investment thesis of being an enabler, hence, justifying our continuous support to the team. I believe the new investors also share the same grand vision that Dropee has in the team’s journey.”
As of today, Dropee has helped companies such as British American Tobacco and Petronas, where it acts as their platform to help their mainly SME suppliers and smaller distribution companies such as Worldline Distribution Sdn Bhd, VCR Cafe, and Rayaco to move their B2B procurement and trading processes online. Their typical wholesale customer serves between 100 to 300 retail customers across Malaysia