Dropee Secures $7M Series A Funding - B2B Wholesale Platform

Dropee Secures $7 Million Series A Funding to Empower Southeast Asian SMEs

A new funding round has been announced by Dropee, a startup concentrating on small and medium-sized enterprises (SMEs) within Southeast Asia. The Malaysia-based B2B wholesale platform, which also provides financial solutions such as working capital loans, revealed today that it has successfully closed a $7 million Series A funding round.

Funding Details and Investors

The funding comprises $3 million in equity and $4 million in debt. This round was spearheaded by Vynn Capital, a returning investor. Additional participation came from HCL Capital, Resolution Venture, and LKF Capital, alongside existing investors Brama One Ventures.

Expansion Plans and Geographic Focus

Currently operating in Malaysia, Singapore, and Indonesia, Dropee intends to introduce innovative financing options for both wholesalers and retailers over the coming year. This expansion will be achieved through collaborations with strategic partners, including regional banks and non-banking financial institutions. To date, the company has raised a total of $8.7 million.

Platform Overview and Key Features

Launched five years ago, Dropee primarily serves the food and beverage, and fast-moving consumer goods (FMCG) sectors. The platform currently supports over 80,000 SMEs, predominantly small retail stores, facilitating wholesale inventory purchases through its marketplace.

Dropee’s marketplace boasts an annualized transaction value exceeding $100 million. It integrates seamlessly with a SaaS e-commerce platform, automating crucial processes like payment collection, order tracking, sales management, and the handling of offline-to-online orders.

The Genesis of Dropee

Lennise Ng, CEO of Dropee, explained that the startup’s origins lie in the founders’ personal experiences. She and a co-founder both hailed from family businesses deeply involved in B2B trading of FMCG products for multiple generations.

This background provided firsthand insight into the inefficiencies prevalent in the wholesale trading landscape across Southeast Asia. Dropee was conceived as a solution to streamline and enhance these processes.

AI-Powered Features and Personalized Recommendations

The platform leverages artificial intelligence to deliver personalized product recommendations. Dropee’s AI-based smart catalog presents each B2B customer with a curated selection of best-selling items, complementary products, and targeted campaigns, all tailored to their specific business requirements.

SMEs have the flexibility to order directly through the wholesale marketplace or via a dedicated sales agent. This approach provides wholesalers with real-time transparency and accelerates order processing.

Financial Services for SMEs

Dropee initiated its financial services offerings in November 2020, providing invoice and supply chain financing with credit terms of up to 60 days. Ng highlighted the challenges traditional wholesalers face in extending credit to SMEs, particularly during the pandemic.

She emphasized that offering credit financing to retailers stimulates increased immediate inventory purchases. Dropee assesses creditworthiness and determines loan terms by analyzing various data points captured through its platform, including an SME’s transaction history and lifetime value within its network.

Future Investment and Growth Strategy

The newly acquired funding will be strategically allocated to expand Dropee’s supply chain financing capabilities. The company plans to collaborate with a wider range of brands and wholesalers throughout Southeast Asia to extend credit payment terms to SME retailers.