This year, investors began to pivot towards B2B startups with an eye on profitability. This week, TechWire reported on this trend, noting that the rise in on-demand services ushered in a new wave of investment for consumer-facing startups.
“But a funny thing happened along the way: Many on-demand companies realized that the big bucks lie not in serving consumers but in catering to businesses,” the publication wrote.
FinTech is no stranger to this pattern, and while venture capital levels have seemed to dwindled in certain markets (analysts found VC funding down by 29 percent in 2016 compared to last year), B2B startups remain the apple of many investors' eyes. India saw a particularly lucrative year. According to reports last week, B2B startups in the nation raised hundreds of millions of dollars this year. And in the final B2B venture capital roundup of the year, India dominated, with two out of just three funding rounds in the B2B space landing in the country.
Supply Chain Management
India continued its dominance in B2B startup funding this year, and ShopKirana gave the nation one final deal to solidify its success. The startup secured pre-Series A funding from Japan's Incubate Fund (making its first investment in India), as well as local investors at Lead Angels Network, reports said last Friday (Dec. 23), though it did not disclose how much it raised. The company offers technology and supply chain management solutions for sellers, offering them a network of thousands of other companies that can participate in supply chains. According to reports, ShopKirana aims to support India's large retailer segment, with many of the businesses in this space small and fragmented, lacking the logistics and technological resources to manage their webs of supply chains.
Based in South Korea, Yello O2O is the business services unit under Yello Mobile, described as a “jack-of-all-trades” holding company. Reports last Friday said the company secured $20.8 million in new funding from Q Capital Partners, which will be used to strengthen the company's accommodation and health care operations, as well as pursue strategic mergers to enter new markets. In addition to accommodation and health care, Yello O2O also services the payments industry as an online-to-offline service provider, supporting businesses that book clients online but then complete their own services offline.
Scoring yet another investment in India, Shadowfax, which provides B2B on-demand logistics and delivery services, announced a $10 million funding round on Monday (Dec. 26). The Series B funding was led by Eight Roads Ventures and other existing backers, following on a $300,000 funding round the company announced last year. Shadowfax said it will use the new investment to introduce new services and expand to new cities in India. Within 15 months, the company added, it hopes to facilitate 100,000 orders a day.