B2B Investment Tracker, July 31-Aug. 7

Startups these days are really focusing on how to help other businesses get things done. While investments in alternative lenders once reigned, backers are now supporting the companies that provide services to other companies, not just money. This week, funding and M&A activity was focused in three areas: Software-as-a-Service, Commerce-as-a-Service, and Logistics, collectively seeing more than $1.9 billion (with a B!) in funding.

The Breakdown:
SaaS – $125.1M+
eCommerce-as-a-Service – $38M+
Logistics – $ 1.805B

SaaS

The Software-as-a-Service industry is quite broad, and investors backed startups in the space that focus on a range of B2B services, from marketing to task management, to payroll streamlining for temporary workers, to document organization.

Reports Tuesday (Aug. 4) revealed that SurveyMonkey is looking toward M&A to strengthen its B2B services. The company is set to acquire SaaS firm TechValidate, a firm that aggregates consumer data to strengthen corporate marketing tools. According to SurveyMonkey CEO Bill Veghte, TechValidate takes “data analytics one step further.” The companies did not disclose the terms of their deal.

The next day, one platform that helps companies manage their daily tasks secured $33 million in Series E funding. The company, Workfront, announced the backing Wednesday (Aug. 5), and while the firm presents itself as a marketing and IT tool, Workfront also offers workflow automation and document management services. The funding, led by JMI Equity, “will support the sales, marketing, and product strategy we have defined, with the objective to be the dominant provider of enterprise work management solutions,” said CEO Eric Morgan.

The on-demand business model is spreading to the B2B world, especially when businesses need to hire contract and temporary workers. Startup company Payable is now making it easier for companies to manage those employees, their payrolls, and their invoices. It’s a process, the company says, that has been particularly difficult for companies to deal with, as each independent contractor may have his or her own invoice format. “We want to be the easiest way to manage and pay contractors,” said co-founder Tad Milbourn in a recent interview with TechCrunch. “We want to help companies streamline their invoicing, onboard their contractors and make it easy to pay them in a tap.” The company, formerly named Tiempo, raised $2.1 million in funding from an array of backers, including Freestyle Capital, Rothenberg Ventures and more, also announced on Wednesday.

Closing out the week was B2B health care SaaS startup Practo, based in India, which announced a $90 million funding round led by China’s Tencent. The company provides health care professionals a platform to manage their patients and organize and maintain their digital records online. Practo said that it already has 200,000 health care providers under its belt, and the new funding will reportedly be used to expand outside of India.

In all, Software-as-a-Service companies saw more than $125.1 million in financial backing.

eCommerce-as-a-Service

Software-as-a-Service’s close cousin, eCommerce-as-a-Service, also saw its share of venture capitalist attention.

While the investors didn’t disclose the details, Aktion Partners did say that it provided a “sizeable” investment in eCommerce-as-a-Service firm CloudCraze. The backing, which was revealed Tuesday, will help CloudCraze’s Salesforce application provide new services specifically to the B2B eCommerce world. According to reports, CloudCraze reduces the average time it takes to implement an eCommerce platform from as much as 12 months to as quickly as 8 weeks. The company’s cloud-based strategy also means B2B companies looking to launch an eCommerce venture can do it for much cheaper.

“CloudCraze is at the center of three major, rapidly growing markets in omnichannel commerce and has an incredible opportunity to take on the perfect storm of the fractured eCommerce space, maturity of the Salesfore SaaS marketplace and a shift towards B2B2C,” said Aktion Partners Co-founder and Partner Chris Dalton in a statement, adding that the investors want to lead CloudCraze to become “a global leader in B2B eCommerce platforms.”

The next day, eCommerce-as-a-Service firm PFSweb announced that it’s reached a deal to acquire CrossView in a $38 million deal – the largest acquisition for the company to date, according to PFSweb CEO Mike Willoughby. The buyout target provides integration for eCommerce systems and provides companies with a strategy for omnichannel sales. Through the takeover, PFSweb will be able to integrate CrossView’s IBM WebSphere Commerce and SAP/hybris platforms, the companies said.

The buyout also means that PFSweb can now support eCommerce software platforms from Demandware, Magento, Oracle Commerce, WebSphere and hybris – a development that Willoughby said makes the company the first eCommerce-as-a-Service provider to support all five.

CloudCraze’s secret investment means it is unclear how much money was invested in the space this week, but thanks to the CrossView acquisition, we can be sure it was more than $38 million.

Logistics

The support for eCommerce-as-a-Startup companies follows the rising demand for sellers to migrate their operations online and reach a more global buyer base. All of those companies going digital will need support in getting buyers’ goods to their doorstep, and investors are similarly boosting their backing for the startups that help eCommerce companies make it happen.

The first deal of the week – and the largest – was announced by logistics giant UPS, which revealed a plan to acquire Coyote Logistics for $1.8 billion. According to analysts, the takeover is part of UPS’s overall plan to avoid the holiday shipping fiasco of 2013, during which the company failed to deliver many parcels ahead of Christmas Day. Bringing Coyote Logistics under the UPS umbrella means the corporation will also acquire Coyote’s existing logistics software and contract carriers.

LetsTransport secured $1.3 million from investors on Wednesday (Aug. 5). The company provides last-mile logistics and deliveries to eCommerce companies, and offers those businesses a digital platform to book and price their needs. The funding, led by Rebright Partners and others, will reportedly go to expansion throughout India, according to co-founder and CEO Pushkar Singh. The investment round followed soon after LetsTransport acquired fellow logistics startup Shifter.

That same day, fellow Indian logistics startup Pickingo also raised $1.3 million by B2B commerce and FinTech venture capital firm Orios. Already, Pickingo has worked with some top eCommerce players in the country, including Paytm and Snapdeal, as well as pharmacies, restaurants and groceries. The on-demand delivery service says it currently completes about 3,000 deliveries every day. According to Orios Venture Partners founder and partner Rehan Yar Khan, the industry is on the cusp of overhauling the way businesses get things done.

“Just like in other verticals such as food, grocery, laundry, etc., hyperlocal logistics will be disrupted through on-demand players using an uberized model,” he said. “We have already seen this model become a huge success in China with billion-dollar players emerging within a year of starting up and also in the U.S.”

Logistics saw the largest investments thanks to UPS’s deal this week, totaling more than $1.8 billion.

Getting It Done

Once again, investors have backed off from alternative lending startups, likely a mix of the rebound in traditional business lending and the uncertainty over incoming regulation of the sector. While venture capitalists and acquirers are less interested in supporting the startups that provide businesses with money, they seem more interested than ever in financing the startups that provide businesses with the tools they need to get things done, from starting their online commerce strategy, to streamlining their day-to-day operations, to getting their goods and services from Point A to Point B.