B2B Payments

B2B Investment Tracker, July 10-17

The Breakdown:
eCommerce: $925M+
Logistics: $11M
V-Cards: ?
Cash Flow Management: $1.9M

In recent years, alternative lenders have been a hot commodity for venture capitalists. But as traditional bank lending to SMEs picks up steam once again, investors may be shying away from the industry. Perhaps that’s why this past week, none of the funds from investors or acquisitions landed in the hands of alt-finance firms. Instead, B2B eCommerce was the big winner, while millions of other dollars went to startups in the logistics, virtual cards, and cash flow management spaces. There weren’t a lot of deals this week, but with nearly $1 billion in investments, it certainly wasn’t a total bust for B2B.

Cash Flow Management

The week began with news Monday (July 13) that ClassWallet secured a $1.9 million financing round led by several backers, including NewSchools Venture Seed Fund and Kaplan Ventures. ClassWallet provides schools and education systems with a digital platform to manage their finances and procure necessary products. According to reports, the startup said it will use the seed money to prepare for the release of the next version of its platform and to strengthen its product roadmap.

The company began as a way to streamline a highly fragmented market that, while valuable, makes it quite difficult on school systems to adequately manage cash flow.

“As school budgets shrink, an increasingly larger portion of procurement is being funded by corporations, foundations, parents and teachers to meet student needs,” said Classwallet founder and CEO Jamie Rosenberg. “The size of this market, up to $23 billion annually, and the amount of inefficiency and lack of transparency is staggering.”

Virtual Cards

The next day, investors turned their attention to a market that infrequently catches headlines. Payment technology firm First Data unveiled acquisition plans this week when it announced it had reached a deal with prepaid and gift card firm Transaction Wireless. The buyout, revealed Tuesday (July 14), will see First Data take on Transaction Wireless’s virtual card enterprise distribution platform, providing businesses with an easy means of launching their own gift card programs. Financial details of the purchase weren’t reported.

“First Data now offers one of the industry’s most integrated, complete and comprehensive prepaid gift card solutions at scale,” said the company’s executive vice president of network and security solutions Barry McCarthy. “Along with our strong gift card processing and Gyft solutions, Transaction Wireless’s outstanding proprietary and comprehensive digital gifting platform will help our clients expand and accelerate their gift card programs.”

Logistics

The next day, yet another B2B sector saw financing, this time from venture capitalists directly. Roadrunnr, which was started by two former Flipkart employees, secured $11 million from several backers, including Sequoia Capital, Nexus Venture Partners and Blume Ventures. Financing was announced on Wednesday (July 15). The startup provides parcel delivery services to eCommerce firms, restaurants and merchants in India, providing hyper-local, on-demand logistics to companies through the development of a technology platform that helps scale services to the client. According to reports, the company plans to use the funding to expand throughout the country and strengthen its delivery network. The announcement was made about a month after reports first emerged that Roadrunnr was in the midst of securing this financing.

B2B eCommerce

Wednesday also marked the beginning of a mini-merger mania for B2B eCommerce. That day, reports said UK-based MAM Software Group reached a deal to acquire Origin Software Solutions and take on its Commerce-as-a-Service operations geared toward the automotive industry.

“With the addition of Origin, MAM Software will be able to provide its global customers with a range of effective B2B and B2C eCommerce solutions,” said MAM Software Group president and chief executive Michael Jamieson in a statement. “By combining our knowledge of business management applications with Origin’s expertise in B2B and B2C eCommerce, MAM will be well positioned to fulfill our vision of becoming a full omnichannel solutions provider and deliver integrated solutions for both online and offline sales.”

Financial details of the buyout were not disclosed by the companies, however.

The week didn’t close out without one massive deal, however. eBay came in Thursday (July 16) with the biggest news of the week that in preparation to stand alone from PayPal, the company has reached a deal to sell its eBay Enterprise unit to a consortium of buyers for $925 million.

“We believe this deal will give us the most opportunity to continue focusing on our areas of proven strength and help our clients win in an incredibly evolving market,” said the company’s president Craig Hayman in an official blog post. “Rest assured, eBay Enterprise remains committed to its clients.”

It was a bit of a strange week for B2B investments. The usual venture capitalist target, alternative lending, was nowhere to be found, with some less popular industries securing significant deals. Plus, the sector saw more mergers than direct investments. But with nearly $1 billion worth of deals – many thanks to the eBay Enterprise sale – we’re sure the B2B industry isn’t complaining.

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