YC alum Dropee, a Malaysian B2B wholesale platform, lands $7 million Series A – TechCrunch
Another SME-focused startup in Southeast Asia has announced a funding round. Dropee, a Malaysia-based B2B wholesale platform that also offers financial services, such as working capital loans, to SMEs, said today that it has closed a Series A round totaling $7 million. dollars. The Y Combinator alum raised $3 million in equity and $4 million in debt, led by returning investor Vynn Capital. Other participants included HCL Capital, Resolution Venture and LKF Capital, as well as returning investors Brama One Ventures.
With operations in Malaysia, Singapore and Indonesia, Dropee plans to introduce new financing products for wholesalers and retailers over the next 12 months by working with strategic partners including regional banks and non-bank financial institutions. He has now raised a total of $8.7 million.
Launched 5 years ago, Dropee mainly focuses on Food & Beverage and Fast Moving Consumer Goods. The startup says it’s used by more than 80,000 SMBs, mostly small retail stores, to buy wholesale inventory through its marketplace, and now totals more than $100 million in annualized transaction value. Its marketplace is integrated with a SaaS e-commerce platform that automates payment collection, tracks orders and sales, and manages offline-to-online orders.
Lennise Ng, CEO of Dropee, said the startup was created because she and one of her co-founders came “from family businesses that have been involved in the B2B trade of fast-moving consumer products for more than two generations”. This allowed them to take a close look at the inefficiencies of the wholesale space in Southeast Asia. Dropee was created to make the process more efficient.
For example, the platform makes product recommendations through its AI-powered smart catalog: every B2B consumer sees a personalized selection of best-selling products, complementary products, and campaigns based on their business needs. SMBs can also order directly from its wholesale marketplace or an assigned sales agent, allowing wholesalers real-time transparency and faster order processing.
Dropee began offering financial products in November 2020, including credit financing for up to 60 days for invoices and supply chain. “It can be difficult for traditional wholesalers to extend credit terms to SMEs, especially during the pandemic,” Ng said. She added that credit financing for retailers helps increase the number of immediate inventory purchases. To assess creditworthiness and loan terms, Dropee uses multiple variables captured through its platform, including transaction data from an SME to Lifetime Value by Business Network.
The new funding round will be used to expand Dropee’s supply chain finance, with plans to work with more brands and wholesalers across Southeast Asia to expand credit term payments for SME retailers.