From just 900 business-to-business (B2B) technology startups India had in 2014, the number has swelled over 3X to 3,200 B2B tech startups in 2018 witnessing 30 per cent compound annual growth between 2014-18.
From just 900 business-to-business (B2B) technology startups India had in 2014, the number has swelled over 3X to 3,200 B2B tech startups in 2018 witnessing 30 per cent compound annual growth between 2014-18. In fact, India has five unicorns in the B2B space including e-commerce delivery platform Delhivery, payment gateway BillDesk, trading platform Udaan, enterprise software provider Freskworks, and India’s first unicorn InMobi — a mobile marketing and ad platform.
However, among these 3,200 startups, majority (70 per cent) have emerged in key industry verticals including enterprisetech, fintech, and healthtech while remaining belongs to industrial, HRtech etc., according to a report by management consulting firm Zinnov and hybrid cloud data services provider NetApp.
“There is a lot of misconception around B2B companies viability. It is also assumed that B2C companies scale better in India but that’s not true because we are growing in the B2B space as well and have also increased multifold from the funding perspective. People think that B2B companies don’t get funding,”Ajeya Motaganahalli, Senior Director and Leader, NetApp Excellerator, NetApp told Financial Express Online.
“While a B2C company like Swiggy would probably need funding of $100 million to scale, but a B2B startup only needs $15-20 million in Series A to get going,” said Motaganahalli.
The rise in B2B startups has been attributed to the digital transformation of businesses including enterprises, financial institutions, hospitals, small businesses, government etc., along with an increase in funding from $797 million in 2014 to $3.7 billion in 2018.
“Another reason for the rise is the return of talent from the US for instance. You have very experienced minds running B2B startups not ones who are just straight out of college. With MNC presence in India increasing and corporate accelerators also increasing in number, B2B startups will naturally increase because they will find a pathway to go the market,” said Motaganahalli.
Moreover, B2B startups have seen an affliction from corporates as well via multiple engagement programmes including corporate accelerators or incubations, acquiring these startups, corporate funds, partnerships, and startup-focused events. Among these existing channels, accelerators have become the emerging engagement model for B2B startups.
Currently over 50 corporate accelerators/incubators are active in India and 80 per cent of that came into existence between 2015-2018, said the report titled B2B Tech Startup Ecosystem and Role of Corporate Accelerators in India.
Here are other interesting findings from the report:
- Over 800 advanced tech B2B startups in 2018.
- More than 400 startups graduated from accelerators in 2015-18.
- B2B tech startups account for 43 per cent of total tech startup base — 7,400 in India.
- Bengaluru is the top hub for B2B tech startups with over 800 startups followed by more than 550 startups in Delhi NCR, and over 400 startups in Mumbai.
- 75 per cent corporate accelerators and incubators are in Bengaluru, Delhi & NCR.