Recently SWAP, a Bangladeshi reCommerce platform has raised 1.25 million dollars in their seed fund stage. This is a remarkable achievement in the context of startups in Bangladesh. The organization took an innovative approach to deal with second-hand goods. The concept of second-hand goods exchange is not new in Bangladesh. Yet there hasn’t been any dedicated platform for the same. Here’s a detailed look at how SWAP works and what drove the seed fund for the platform.
The main concept of reCommerce is simple. Sell a used good or exchange one for the other. It wasn’t until recently that this already existing system had a commercialized name. reCommerce or reverse commerce aims to make a business out of used goods. In addition to generating monetary value for the seller, the platform has other corresponding goals.
Firstly, reCommerce helps to prolong the life cycle of any good. It also helps to materialize more value out of a product and ensures a lesser impact on the environment. ReCommerce offers limitless possibilities when it comes to second-hand goods. Even though the main market for reCommerce is smartphones and electronic gadgets, the horizon is expanding to include more and more goods.
How does SWAP work?
SWAP is the first reCommerce platform of Bangladesh. As the first of its kind, the platform has been able to generate a considerable buzz around itself. The concept of selling second-hand goods isn’t new in Bangladesh. There are different third-party shops as well as C2C transactions happening over second-hand goods. However, there was no unified platform for all kinds of second-hand goods. SWAP aimed to fill this void.
The startup was founded by Parvez Hossain, a corporate man turned serial entrepreneur. His previous ventures include Livewire, one of the leading gadget stores in Bangladesh. The ideas for SWAP were generated from Livewire. There Mr. Hossain saw a huge secondary market for electronic gadgets.
SWAP was found in late 2020 amidst the pandemic. While most businesses were on a recessionary trend, the years of experience in running a business along with a carefully curated team set up SWAP for success. Due to its unique nature and appeal to the customer, SWAP was able to make a space for itself in a short period.
SWAP offers an innovative approach to selling second-hand goods. The platform offers a range of categories to sell and buy the products. One of the issues with C2C transactions is the lack of security. There are countless cases of customer defrauding in recent times which poses a question mark over the secondary market transactions.
A unified platform drastically reduces such risks. In addition to that, SWAP acts as an intermediary between the transactors. A seller doesn’t necessarily contact the buyer, rather with SWAP itself. The multi-channel transaction helps to ensure the security and quality assurance of the product.
SWAP raises $1.25mn in Seed Funding
SWAP started its venture at an economically turbulent time. This automatically puts a speck of doubt on whether the business will be able to sustain itself in the long run. However, in less than 14 months, the company recorded a net gross merchandise value of over 14 million BDT. That is almost 1 million BDT per month.
The high transaction rate accounted for the incredible growth of the company. The successful operation of any business grossly depends on the core team. SWAP has made all the right core decisions from its inception which led them to its current position. Tanvir A Mishuk, the MD of Nagad, personally oversaw the recruitment of the core team. He is also one of the earliest backers of the venture.
Several key factors accelerated the funding process for SWAP.
The domestic market for used electronic goods has an addressable market of over 3 billion dollars. This is a huge opportunity for any business to take the charge. SWAP took a holistic approach of B2B, B2C, and C2B2C to ensure that they are catering to every form of need possible. The affordability and reliability easily make SWAP the first choice for many budget buyers out there.
SWAP has also made additional income channels for the economy through its agents. A customer doesn’t need to come to any physical shop for the transaction. They can simply get it done through the agent. Currently, SWAP has over 3000 agents as part of their business.
SWAP in its 14 months journey has amassed over 40,000 registered users. With the high GMV rate, the business is poised to scale up significantly over the next 6 to 12 months. The high reliability in the service has helped the business amass a huge client base in such a short time.
Global e-waste is expected to hit 4.5 million tons by 2025. This toxic waste is not only a threat to human lives but also adds a headache to the already deteriorating waste management process.
SWAP has been able to curb 11000 metric tons of carbon emission. The company also reportedly helped to save 65 metric tons of e-waste in Bangladesh. In addition to bringing affordable gadgets to the consumers, the company is also helping to increase the life cycle of electronic products.
Accelerating Asia has been the lead investor in the seed round for SWAP. SWAP also received investment from ZA Capital Advisory. Both the organizations pointed out that the circular economy approach of SWAP combined with job generation and e-waste management has been a significant determinant behind the investment. The CEO of ZA Capital Advisory, Zahedul Arefin is also working as an advisor for SWAP. With scaled-up operations, the business aims to tap into newer secondary markets alongside tech and gadgets.
There is a close relationship between technological innovation and the increment of products in the secondary market. SWAP has been effective in tapping into the secondary market. The innovative approach combined with the value generation has helped them to see rapid growth.