Malaysia Dropee Raises US$7 mil to increase digitalisation of SMEs
Malaysian based, Southeast Asian focused B2B wholesale startup, dropee, today announced it has completed its US$7 million (RM29.3 million) Series A funding comprising a combination of equity and debt investments from new and existing investors.
The current financing round, led by returning investor – Vynn Capital, welcomes new investors including HCL Capital, a Hong Kong-based family office which represents a Malaysian family business; Resolution Ventures, a VC that focuses on fintech companies in Southeast Asia; and LKF Capital, corporate venture capital arm of Lan Kwai Fong Group. Dropee's Series A fundraising also saw participation from another existing investor, Brama One Ventures, as well as other undisclosed new investors.
In the five years since its launch, Dropee has established itself as one of the fastest growing B2B wholesale SaaS-enabled marketplace in Southeast Asia with market presence in Malaysia, Singapore, and Indonesia. Rather than expand to new markets,the fast growing startup aims to strengthen its foothold in Indonesia and Malaysia by providing more value added services such as eCommerce services, on-ground activation team, and financial support.
Over 80,000 SME businesses procured wholesale inventories in its marketplace, annually totalling more than US$100 million (RM419 million) in transaction value. On top of its SaaS and marketplace businesses, Dropee has also expanded its product line to support loan and financing deployment.
Lennise Ng, cofounder and CEO of Dropee, said: “With this Series A round, we're doubling down on helping micro and small local businesses to adopt digital solutions so they're able to bring down their operating costs, have more access to financing support, and increase their business longevity. We work with thousands of Dropee partners (the wholesalers, distributors, fulfillment and warehousing partners) to serve local retailers with a whole new experience in stocking up inventories in a better, faster, and cheaper way.”
Seeing financing as a key value proposition, Lennise adds, “We believe that providing financial support will add more value to our users and that increases user retention on the platform. The pandemic has magnified the hardships amongst the SMEs with lack of cash flow to support their day to day activities of their business. By extending up to 60 days credit terms, with zero hardcopy documentations, SMEs can leverage on this extended cashflow to invest more in areas of their business that grows more sales (eg: purchasing more popular / best-seller products).” The majority (around 70% of approved users) of current credit terms are only at 35 days. Dropee says it has found a formula to create a revolving credit and terms for its users
“We have been consistently impressed by Dropee's growth and the team's ability to execute. As such, we are glad to invest more capital to back Lennise and Aizat Rahim's vision in transforming the industry to support micro and small businesses. As supply chain is the backbone to any industry and sector, and we believe Dropee will play a very crucial role in helping small businesses adapt and grow in the new normal,” said Victor Chua, Founding & Managing Partner of Vynn Capital.
Funding will also be used to accelerate financing offerings for wholesalers and retailers over the next 12 months. Dropee has built a successful track record with credit financing portfolios over the past year and is ready to scale the offering by working with strategic partners, including regional banks and non-banking financial institutions.
Jack Hon, Managing Partner of HCL Capital adds on: “We believe the pandemic has forced Malaysia and Southeast Asia to digitalise B2B sales faster than it would originally have and Dropee sits at the forefront of this revolution. They also possess a superstar team that has driven the business forward and has the ability to not just take advantage of this rapidly changing landscape but shape the future of how Malaysia and Southeast Asia's B2B e-commerce will operate. We are very proud to be part of Dropee's journey and hope to be able to contribute to their growth.”
For brand owners and wholesalers, Dropee currently offers a one-stop solution from complete offline-to-online B2B order management to automated payment collection from customers, with hassle-free and seamless paperwork processes.
Dropee's last financing round was in July 2020 where the company raised US$1.3 million (RM5.5 million), and its earlier seed round of US$350,000 (RM1.5 million) was announced in Jan 2019.