Inflection Point Ventures backs Dropshop in digitising last-mile distribution

Dropshop is a Bengaluru based company that supports FMCG brands to go digital especially in their last-mile delivery. It was founded in 2019 by Udit Dhawan, Rohit Fernandes and Ravi Teja. The company has succeeded in raising Rs9.3 crore in a funding round conducted before the A-series funding. It was led by angel investment firm Inflection Point Ventures while their existing investors Axilor Ventures and The Chennai Angels had also been part of the programme.

This is the 18th deal done by Inflection Point Ventures among the Indian startups in 2021. The firm had announced its plan to invest almost Rs155 crore in more than 60 startups in 2021. The firm had invested in the SaaS platform Glamplus before investing in Dropshop.

Dropshop is planning to use the funding to enhance its product, expand to new cities and enhance its capacity to support more companies. They have announced their expansion to cities like Chennai and Hyderabad.

Udit Dhawan, the founder and CEO of Dropshop mentioned that the funding would help them to develop their retailer base and also the portfolio of their brand. He also mentioned the development of their team, product and distribution processes as the immediate targets.

Dropshop has been in the market for almost a whole year. It has helped several FMCG companies in digitising their last-mile delivery like sales, logistics and credit to retailers. Enabling the last-mile deliveries of the FMCG companies has helped them to reach their market potential. FMCG companies function with the help of traditional distributors and this has crippled the growth of FMCG companies to a great extent. Dropshop’s efforts to digitise their last-mile deliveries have enhanced their sales value.

Studies reveal that almost 20% of the market potential of some of the largest brands that rely on retail distributors is lost due to a lack of appropriate last-mile distribution. FMCG customers have experienced a 30-100% of growth with the help of Dropshop. The company has also helped several retailers who are not able to make use of formal credits due to a lack of credit history or proper documentation.

Dropshop is currently trying to expand its service to smaller retailers with the help of NBFCs and fintech players. Including ITC, Godrej Consumer Products, Mamaearth, Postcard, Reckitt Benckiser, Nilgai Foods, and Marico it has now almost 10,000 retailers in Bangalore.

Mitesh Shah opined that Dropshop had invested in an area that is very relevant and unexplored. The FMCG companies building their own methods of last-mile deliveries are highly expensive and not recommendable in terms of business. Dropshop with the help of digital technology can cover more than 90% of the total area. Jignesh Kenia, IPV’s Lead Investor, mentioned that Dropshop’s timely approach in this field would help them to expand easily, increasing the sales for their FMCG customers.