IPV leads early-stage investment in FMCG distribution platform Dropshop

FMCG distribution platform Dropshop has raised Rs 9.3 crore in a pre-Series A round led by Inflection Point Ventures. Existing investors Axilor Ventures and The Chennai Angels also participated in the round with 42.vc joining the round via AngelList. 

The funds will be used for strengthening the product and scaling up of operations for handling more FMCG brands and entering new markets such as Chennai and Hyderabad.

“FMCG companies are often faced with a critical issue of increasing margins without burdening their customers. Traditionally, they have adopted the approach of building distribution and last mile networks in house. Given the geography of India, it is not viable business wise to create expensive distribution networks. This is a completely untapped opportunity which Dropshop has identified and they are working aggressively to scale up,” said Mitesh Shah, Co-Founder, Inflection Point Ventures.

The startup is a full-stack platform for FMCG companies to digitise their last-mile distribution such as sales, logistics and credit to retailers. With this, the brands get real-time visibility into demand and supply gaps, fulfilment ratio, and drive targeted growth. It claims to provide 30-100 per cent higher sales and fulfilment than traditional distributors for its FMCG customers. 

For FMCG companies, setting up their own distribution network across the country could be an expensive affair and this is where Dropshop comes into play. “With the help of technology, they are able to cover 90 per cent of the region compared to 60-70 per cent which is covered by the traditional distributors," said Jignesh Kenia, Lead Investor, IPV.

Dropshop Network reaches over 10,000 retailers in Bengaluru and works with 5 of the top 10 FMCG companies in India including ITC, Marico, Reckitt Benckiser and Godrej Consumer Products. It clocks over 15,000 orders per month with Rs 4 crore GMV per month.