From $797 Million to $3.7 Billion: The Rise of B2B Start-ups in India
“In 2015, when we went and met investors to raise funds, we were often asked if our start-ups are in food delivery, local services or local logistics space,” recalls Rahul Garg, founder and CEO of a B2B (business to business) commerce company Moglix, when talking about the challenges they faced when starting up. Most start-ups in B2B space have similar stories to relate when during 2014-15 they had trouble raising finances in India as the ecosystem was heavily skewed towards business to consumer (B2C) or the start-ups targeting consumers directly. Recent years, though, have seen a massive shift. Picture this: While B2B start-ups in India raised only Rs $797 million in 2014, they could secure $3.7 billion in 2018, a rise of 364 per cent, findings of a recent study by NetApp and Zinnov show.
The report, B2B Tech Startup Ecosystem and Role of Corporate Accelerators in India, also reveals that B2B tech start-ups have more than tripled — from 900 to more than 3200 — since 2014.
“This can largely be attributed to a spurt in the need for digital transformation of enterprises, financial institutions, hospitals, government, SMEs, etc. Adding fuel to their success is the growing investor interest,” it says.
According to the report, about 70 per cent of these start-ups are in the space of enterprise tech (41 per cent), fintech (19 per cent) and health-tech (9 per cent), while the rest of 39 per cent are in areas of software as a service (SaaS), customer relationship management (CRM), alternative lending, expense management, medical internet of things and artificial intelligence-enabled predictive platforms.
The space has also seen a lot of action on advanced technology front and the report says that more than 800 start-ups in the country today are working on advanced technologies such as data analytics, Artificial Intelligence, Internet of Things, Blockchain, 3D printing etc. Segregating over 800 of B2B tech startups as ‘advanced tech startups’, the study indicates their year-on-year growth at 60 per cent is much ahead of the 20 per cent growth for the entire tech start-up space (B2B, B2C).
When it comes to geographical locations, Bangalore is the top city for B2B tech start-ups, followed by Delhi NCR and Mumbai. They account for 60 per cent of all B2B tech start-ups in the country.
“Presence of huge number of MNCs, access to technology, extensive talent pool, plus a strong presence of incubators and accelerators are key to the consistent start-up growth in Bangalore (800+) whereas top institutes like IIT Delhi and Delhi University have fostered start-ups in various verticals across Delhi and NCR (550+). Mumbai (400+) being the financial hub, is home to the largest fintech start-ups,” the report says.
It adds that Hyderabad, Pune and Chennai account for more than 500 B2B start-ups collectively and are posited as the growing start-up hubs of the country.
Note: The coverage is based on press release picked up by the publication for an industry story.
Blog Source: Business Today