Power2SME, an online buying hub for small and medium enterprises, has raised an additional $26 million (Rs 166 crore) in its Series E funding round from existing investors Inventus Capital Partners, Accel Partners, Kalaari Capital, and Nandan Nilekani, a company statement said.
The company’s current Series E round also includes an investment of $10 million from the International Finance Corporation, the private sector investment arm of the World Bank Group; however, the commitment was made in May this year.
Power2SME's total funding in this round amounts to $36 million (Rs 231 crore).
Operated by Gurgaon-based BEBB India Pvt Ltd, Power2SME said the latest round, which is the firm’s largest deal till date, is a co-investment by its existing investors with participation from IFC.
“Our investment will help Power2SME capitalise on the growing demand for their solutions and accelerate the company’s pace of product innovation,†Parag Dhol, managing director at Inventus Capital Partners said.
The company said it will use the additional financing to continue geo expansion, accelerate product growth and innovation, invest in additional sales and marketing resources, and continue evaluating strategic acquisition opportunities.
Power2SME was founded by R Narayan in January 2012 with a seed capital of Rs 2 crore and started operations in July that year. In October 2012, the company raised Rs 10 crore in a Series A round from Inventus Capital Partners and Kalaari Capital.
In April 2013, it raised $6 million (Rs 35.7 crore) in its Series B round of funding from its existing investors, with new investor Accel Partners coming on board.
In January 2016, the company raised funds from Infosys co-founder and former UIDAI chairman Nandan Nilekani with participation from existing investors.
The company has three properties—Power2SME.com, FinanSME.com, and SMEShop.com. It operates out of seven offices and 14 states in India and its current employee strength is 250. It has a registered base of 60,000 SMEs on its platform.
In a recent interview with VCCircle, Narayan said that the company almost tripled its revenue from Rs 240 crore in FY2016 to Rs 870 crore in FY2017.
"We hope to keep up the momentum. In the current fiscal year, we hope to achieve nearly Rs 1,800 crore in revenue,†he explained.
“In terms of transaction size, we were earlier at an average of Rs 12 lakh per transaction. That has gone up to around Rs 35-40 lakh per transaction,†he added.
Competition
Other deals in the online business-to-business (B2B) space include Noida-based industrial goods marketplace Moglix, which in July this year raised $12 million (around Rs 77 crore) in its Series B round of funding from IFC and Silicon Valley-based venture capital fund Rocketship.
Moglix’s existing investors Accel Partners, Jungle Ventures, Shailesh Rao (former executive of Twitter and Google) and Venture Highway also participated in the round.
Brick2wall Technologies Pvt. Ltd, which runs an online marketplace for construction material and other related services, has raised $200,000 (Rs 1.3 crore) in an angel round from a clutch of individual investors in July this year.
B2B marketplace Udaan.com raised an early-stage investment from Lightspeed Venture Partners in November 2016.
In 2016, Kalaari Capital and SAIF Partners-backed Industrybuying.com raised Rs 12 crore ($1.8 million) in debt financing from venture debt provider Trifecta Capital.
On the other hand, Noida-based IndiaMART InterMESH Ltd shut down the B2B wing of its online business goods marketplace Tolexo due to flagging sales and underperformance following the government’s demonetisation move.