Matrix Report: B2B Startups Garnered $8.5 Billion in Funding Over Last 8 Year
- ByStartupStory | February 18, 2023
According to Matrix Partners India, B2B startups in India have secured more than $8.5 billion in equity funding from investors through 500 funding rounds since 2015.
Matrix Partners India’s report on the state of the B2B sector, ‘Digitizing Make In India,’ reveals that the segment has generated six unicorns, which are privately held startups valued at $1 billion or more. Ofbusiness, Moglix, Zetwerk, and Elasticrun are among the six successful startups mentioned in the report.
According to Matrix Partners India’s report, the total investment in B2B startups has been increasing at a rate of 46% annually since 2015 and reached $3.5 billion in 2021. Despite a slowdown in investments in general, equity investment in B2B startups reached $2.1 billion in 2022.
Avnish Bajaj, founder and managing director of Matrix Partners India, stated that India is in a distinctive position where it is promoting manufacturing and agriculture while simultaneously becoming a digital economy. He also noted that India’s digital infrastructure is among the best in the world.
Matrix Partners India’s report suggests that the B2B-enablement sector is anticipated to expand even more as tailwinds such as digitization, the formalization of the economy, global supply chain realignment due to geopolitical tensions, and government support through foreign direct investments and product-linked incentive schemes continue to create opportunities for innovative and disruptive practices by new-age companies.
Matrix Partners India has invested in a number of B2B platforms, including OfBusiness, Captain Fresh, FarMart, and LoadShare. According to Avnish Bajaj, the founder and managing director of Matrix Partners India, India’s tech penetration in GDP will likely surpass 30-40% due to the creation of unique digitally-driven businesses, similar to the US and China. This prospect excites the firm.
In addition to analyzing investment trends, Matrix Partners India’s report also conducted a survey of over 150 stakeholders from B2B and agritech firms in India. The survey results indicate that 53% of respondents anticipate a growth rate of over 10% annually in the Indian manufacturing sector over the next five years. This growth is expected to be reinforced by increasing exports from India, particularly in industries such as electronics, chemicals, automobiles, iron, and steel.
According to Matrix Partners India’s report, 68% of survey respondents anticipate annual growth rates of over 10% for Indian merchandise exports in the next five years. Sudipto Sannigrahi, a principal at Matrix Partners, believes that the manufacturing sector will contribute $1 trillion to India’s GDP over the next 7-10 years, and that startups have the potential to enhance the performance of SMBs and agriculture segments through improved productivity. With the introduction of GST and UPI, traditional sectors are becoming more comfortable working with startups, leading to optimism for the B2B segment.
In terms of the manufacturing sector, Matrix Partners India’s report pointed out that Indian tech startups should focus on disrupting marketplaces for the procurement of raw materials, services, and software for factories, as well as blue-collar staffing and management solutions and logistics. These areas were identified as significant drivers of disruption in the industry.
The report highlights that Ofbusiness, Zetwerk, and Ximkart are currently addressing the challenges of raw material procurement for manufacturing. In the agriculture sector, the report recommends that new-age tech platforms focus on improving farm yield productivity, farm-to-market linkages, and access to credit for farmers. Companies such as DeHaat, Agrostar, and Samunnati are already operating in this space and have made efforts to enhance credit provisioning and farm yield productivity.
The report suggests that there is an opportunity for startups to focus on hardware-based precision farming and create platforms that facilitate farmers’ access to global demand. In addition, the report highlighted that nearly 30% of the 140 Indian IPOs that have taken place since 2020 were from the B2B sector.
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