This is a guest post by Richard Armstrong who is an early stage investor in many startups in both SE Asia and globally. Plus Richard has cofounded several companies.
Guest Author: Richard Armstrong
One of my investments is in the Bangladeshi company, Priyoshop.
Not long ago they raised $5m in Pre-Series A funding led by Century Oak Ventures with a number of other well known VC’s taking part.
What is their model?
Launched during the pandemic in 2021, Priyoshop helps small businesses source goods from over 200 major brands like PepsiCo, Coca-Cola, etc.
Unlike some other models they do not purchase and hold inventory. Rather they more act as a facilitator than a middle man.
This means that they provide a platform that allows these businesses to source goods, gain access to consistent and competitive pricing, and also get next day delivery.
All of this helps the small business maintain their margins while growing their business.
Additionally they help their customers get access to financing, which is often a key bottleneck to scaling for their small business customers.
A very interesting market
Bangladesh still has a massive informal retailer market. Of the estimated $200bn in annual retail sales, 97% of it is still these informal retailers.
And most of that is taking place at these local neighborhood shops. Who until now still operated very inefficiently.
They’d experience frequent stockouts, inconsistent revenue and very little access to financing.
All of these things are now changing with the help of Priyoshop.
What is their secret sauce?
I like to think of their secret sauce as cracking the whole chicken and egg problem of creating a thriving procurement marketplace.
As many investors know, marketplaces are one of the hardest models to crack. Because typically either side of the marketplace doesn’t get much value until the marketplace is already quite popular.
And conquering this problem takes a finely tuned combination of both strategy and luck.
But Priyoshop already has over 55,000 merchants participating this year. They
Logistics is the other competency they have gone quite deep on. Developing a multitude of delivery channels from modern trucks to bicycles like the one below.
You gotta bring the right tool to the right problem!
What will they do with the extra cash?
Priyoshop will use the funding to enhance their tech infrastructure while also expanding their geographical reach and market penetration.
For example they have gotten into hotel and restaurant supply chains recently and are experiencing rapid growth in this new channel.
The tech part includes things like their popular merchant-facing app and the numerous systems that power the backend of their sophisticated marketplace.
Closing thoughts
I am excited about where Priyoshop is going and the potential that is ahead of them.
I think we are going to say small businesses in Bangladesh evolve massively in the decade ahead and Priyoshop is well positioned to ride this wave and become something truly remarkable.
I also think that it cannot be understated just how good the founding team is. Asikul Alam Khan (the CEO) and Dipty Mandal (CMO) are as resilient and capable set of founders as you’re gonna find out there.
And I’ll be rooting for them!
