The first quarter of 2015 has come to a close, and Q2 has opened up with a bang in B2B investments with venture capitalists creating one of the busiest weeks of the year in B2B funding. Software-as-a-Service and alternative finance maintained their popularity among investors, but backers opened up their wallets for an array of other B2B startups, including logistics and cash flow management. Altogether, VCs pumped more than $130 million into the world’s innovators working to make B2B operations faster, less expensive, and more efficient.
The week began with good news for the B2B SaaS startup community when startup investor 500 Startups announced Monday (April 13) a $10 million fund aimed at boosting small businesses in this arena. Named the DistroFund, the new backing will first pump between $100,000 and $250,000 into companies that have already gained a bit of traction in the market. According to 500 Startups, the fund will focus on businesses that are beyond the seed funding stage, and will look to help these startups achieve Series A funding deals.
Only one day later, another multimillion-dollar backing in the SaaS space was announced. Just over a year old, B2B Software-as-a-Service firm DemoChimp revealed Tuesday that it has obtained $2.8 million from backers, spearheaded by Peak Ventures and other venture capitalists. DemoChimp’s software offers a demo automation platform for business buyers, allowing procurement officials to view personalized product demos. The goal of the service, DemoChimp says, is to obtain buying consensus within businesses earlier in the process, helping suppliers to achieve shorter sales cycles.
According to DemoChimp CEO Garin Hess, building buying consensus is “the biggest problem in enterprise sales” today, citing research that more than five buyers on average at a company are involved in the purchasing process. Peak Ventures partner Sid Krommenhoek said in a statement that the platform is “the fastest way we know to grow enterprise revenue and accelerate sales.” The service, he added, offers real-time visibility into buyer habits.
The alternative finance industry remains closely watched – and closely backed – by venture capitalists today as innovators work to fill the gaps felt by small businesses in need of working capital. MytripleA kicked off the week with the announcement on Tuesday (April 14) that it secured new funding. The Spanish firm already cleared a major hurdle when it obtained approval by regulators to launch its online P2P lending platform, but the more than $1 million in financial support the company received should make business operations at least a bit easier from now on. SME investor GLI Finance Limited led the funding this time, reports said, and the aid includes the commitment of sourcing more than $10 million in loans accessed through MytripleA.
“This investment is a perfect fit with our strategy of focusing on unique platforms which provide capital to SMEs,” said GLI Chief Executive Geoff Miller. “It also enables us to expand our portfolio into Spain, which we see as a particularly attractive market due to its rigorous risk controls and robust regulatory approach.”
That same day, another investment in the alternative lending space was announced. On the heels of a $20.5 million Series C funding round, alternative finance platform Lendio announced Tuesday (April 14) that it reached an agreement to acquire business financing facilitator Business Bounce. The takeover not only highlights the growth of Lendio’s service to match small business borrowers with lenders, but will bring the company to the East Coast and the financial capital of the world, New York City. “The acquisition is an important part of our strategy to accelerate loan volume and meet the current business loan demand from business owners on our marketplace,” said Lendio CEO Brock Blake. Financial details of the Business Bounce takeover were not released by the companies.
VCs’ Diverse Investments
Despite millions of investments by B2B-focused venture capitalists in the usual spaces of SaaS and alternative finance, investors this past week demonstrated just how diverse and multifaceted the B2B startup community can be.
With such a fragmented logistics and product delivery sector in India, the market is ripe for startups to strengthen the scene with new innovations. The Porter, based in Mumbai, is one of these startups, and the company announced Monday (April 13) that it has nabbed $500,000 in backing from venture capitalist fund Kae Capital. The Porter works with B2C eCommerce sites as well as B2B industry players to facilitate product delivery, but the company really flexes its innovative muscles with the launch of its mobile application, allowing customers to track their shipments in real time. “The goods transport business is highly fragmented in India,” said The Porter Co-Founder Pranav Goel. “Its fare varies based on the season. And so we are building complexities to factor these changes. Experts say The Porter is one of dozens of startups popping up in India’s market that, at present, has no true leader. It’s a matter of time before that leader emerges, though.
Travel Industry Logistics
India-based Commeasure Solution India revealed $1 million in backing from Singapore-based venture capitalist Jungle Ventures, a move that secures financial support for Commeasure Solution’s B2B hotel logistics services. The startup provides hotels a way to develop their booking systems, and the funds will be used to spread those tools throughout Southeast Asia.
Cash Flow Management
PrimeRevenue is tackling the issue of late payments to suppliers with its cash flow management service, and the tool just received $80 million in funding from BBH Capital Partners. The money, PrimeRevenue said Tuesday (April 14), will be used to expand its workforce. According to reports, PrimeRevenue already services suppliers of some of the world’s largest corporations, including Lowe’s and Volvo. In an effort to end the practice of paying suppliers 60 days – or even 180 days – after a corporation receives an invoice, PrimeRevenue CEO Paul Bain said that its service allows suppliers “to get paid as early as Day 2 after they submit an invoice.” Plus, he added, that early payment comes at a better rate than if they were to take out a loan from a mainstream bank.
This week, Goldman Sachs put millions in its confidence of Billtrust, which closed a $25 million funding round, announced Wednesday (April 15). Along with Bain Capital Ventures and other investors, Goldman Sachs Private Capital provided financial backing to the invoice processing and cash flow management firm, which said it plans to use the cash to fund new, strategic acquisitions.
“The company has made tremendous strides in transforming the payment process in industries that range from electronics to trucking to consumer products,” said Bain Capital Ventures Managing Director Matt Harris in a statement, “and we see even more opportunity as businesses continue to address the lag in electronic adoption in the B2B payments space.”