Dropee is second Malaysian startup to be accepted into Y Combinator
Malaysia-based B2B wholesale marketplace, Dropee has gained acceptance into one of the most prestigious Silicon Valley seed accelerators, Y Combinator, joining its Winter 2020 cohort. Dropee is the second Malaysian startup to enter the program after Dahmakan in 2017.
Over the past year, Dropee claims a grown rate of 400% with more than 4,000 retail users across Malaysia. Its last USD$350,000 (RM1.48 million) seed round was raised from Vynn Capital and Prasetia Dwidharma. It is on the cusp of closing a more than US$2 million (RM8.47 million) follow-on funding with one of its investors being Y Combinator.
Dropee was birthed from the drop-shipping concept where local independent retailers are able to discover the right suppliers to offer products that their customers would need. The startup uses technology to change the way independent retailers stock their shelves by unburdening small business owners from decades-old obstacles such as inventory risks and access to capital. Unlike other B2B marketplace platforms, which act as middlemen or online distributors, Dropee leverages on artificial intelligence (AI) and predictive analytics to forecast which products will be on demand at local retailers in order to source and manage inventory as efficiently as possible.
Dropee will be focusing on building up its presence across Malaysia, and at the same time setting its eyes on the next few countries such as Indonesia and Thailand for expansion. This impending round of funding will mainly be used to hire technology and marketing talents.
One of the key drivers for Dropee is their passion in helping local retailers to keep traditions alive. “Our neighbourhood retail shops are run by business owners dedicated to serving their local communities. They know how to do things the right way, and we want to help them to be even better,” says Aizat Rahim, cofounder and COO of Dropee. “Additionally, local independent retailers play a huge role in the supply chain industry and these businesses are often overlooked or ignored, yet represents a large piece of any economy.”
The rise of e-commerce platforms, CEO of Dropee, Lennise Ng believes, will pose a great challenge to the large chain retail stores. However, small independent retailers still have an incomparable edge that no other businesses can easily replicate – a connection to its local community. “Mom-and-pop stores are the best when it comes to customer service and they have been doing so for decades. The way they treat their customers is almost like family, and we want to maintain this tradition by helping them to keep their businesses around for many more decades to come.”
One of the ways it is doing this is by solving two of the biggest problems Malaysian small business owners face – financing and inventory risks. Many local retailers struggle to access capital for their business mainly due to undocumented paperwork and no collaterals for their loans. On top of that, these retailers are not eligible for any credit term payments from various distributors and wholesalers across Malaysia. Dropee is addressing this issue by providing up to 60-days credit terms to all brick-and-mortar retailers when they purchase wholesale products on the platform.
Dropee also tackles retailers’ inventory problems by offering risk-free returns on products that do not sell in retail stores. This allows retailers to try out, introduce new brands and products to their local communities. New brands and suppliers enjoy this benefit too as it saves them time and money to convince retailers to stock up their products in their store.