The B2B e-commerce sector in Southeast Asia becoming a lucrative growth opportunity for venture capital firms PayNXT360

The B2B e-commerce sector in Southeast Asia becoming a lucrative growth opportunity for venture capital firms

Globally, B2B e-commerce is gaining increasing prominence among retailers, and the trend is no different in Southeast Asia. With retailers in the region rethinking their supply chain, B2B e-commerce platforms are taking preference over traditional distribution channels. This has resulted in the growing market size for B2B e-commerce over the last few years, and the trend is expected to further persist from the short to medium-term perspective. With the projected growth in the segment, the B2B e-commerce market is attracting venture capital dollars across the region, as investors bet on the lucrative growth industry. For instance,

In September 2022, Ezee, the Singapore-based B2B e-commerce platform, announced that the firm had raised US$7.5 million in its Series A round, which was led by Ayala Corporate Technology Innovation Venture Fund, one of the top venture capital firms in the Southeast Asian region. The firm is planning to use the capital for expanding its market share and developing new product features for its B2B procurement platform.
The new product features are expected to improve the customer experience while extending the firm's reach to serve better in new markets. Furthermore, the firm is also planning to use the investment to accelerate its growth in Indonesia, Malaysia, and the Philippines. As of September 2022, the firm had sold more than 130,000 across 600 categories from a strong supplier base of 2,000.

As the market is projected to grow even more over the next three to four years, firms are also raising a funding round to scale their operations. For instance,

In March 2022, GrowSari, the Philippines-based B2B e-commerce platform, announced that the firm had raised an additional US$32.5 million as part of its Series C funding round. In January 2022, the firm also raised US$45 million under its Series C round. Both the investment rounds were led by KKR and included participation from Temasek Group, Pavilion Capital, and International Finance Corporation. Across the Philippines, the firm has served over 100,000 stores as of March 2022, and with the capital raised, the firm is planning to further scale its operations across the country.
In May 2022, SwipeRx, the pharma-industry-focused B2B commerce platform, announced that the firm had raised US$27 million in its Series B round, which was led by MDI Ventures. Along with offering B2B commerce services to pharmacies across Southeast Asia, the firm also provides users with up-to-date and latest healthcare news and drug information. More than 45,000 pharmacies across the region use the app, with 8,000 in Indonesia alone. Notably, the firm is also planning to use the capital to further scale its operations in the Southeast Asian region.
In Vietnam, Telio, the B2B e-commerce player, is also planning to raise fresh capital in the range of US$50 million to US$60 million. As of August 2022, the firm had served over 60,000 stores in Vietnam and is planning to raise the capital to further scale its operations in the country. Notably, the B2B space is highly competitive in Vietnam, where Telio is competing with VinShop, the B2B e-commerce platform which has a retail network of 100,000 stores and is backed by Kilo, the venture capital firm. Apart from Telio and VinShop, there are others players operating in the sector, which includes EI Industrial and Buy2Sell.

Furthermore, to create an omnichannel structure, firms are also entering into mergers and acquisition deals, which will enable them to streamline their operations and execution. For instance,

In June 2022, Space Matrix, a Singapore-based office design firm, announced that the firm had acquired Pursuite, a B2B e-commerce platform for procuring furniture, fixtures, and equipment. With this acquisition, Space Matrix aims to simplify the supply chain and make the execution of office design more seamless.
With corporates adapting to more flexible working arrangements driven by the global pandemic, the demand for office redesign has surged across Southeast Asia, as well as India. This growing demand along with the S$15 billion addressable markets in the workplace design and build sector in Asia, means that the acquisition of Pursuite will assist Space Matrix in further accelerating its growth.
Furthermore, Space Matrix is planning to use machine learning and artificial intelligence for mining design data and providing insights to clients in designing future offices.

Over the next three to four years, PayNXT360 expects more such strategic merger and acquisition deals in the Southeast Asian B2B e-commerce market. Furthermore, as the sector continues to record strong growth from the short to medium-term perspective, PayNXT360 expects more venture capitalists’ dollars to flow into the market, thereby boosting competition and innovation in the sector.