B2C log, zaraa baaju ho jayo boss, B2B wale bhi aa rahen hain

(Translates to: B2C folks, please step aside, here come the B2B dudes)

I marked this tweet from Dev in 2013. At that point in time, we had already made a bunch of B2B / SaaS bets and unknown to us then, more were to be made through the entire 3+ years of the Fund I portfolio buildout.

B2B blog

Here’s the article that the tweet referred to as well – there isn’t much to argue with – that’s the scary part for these businesses.


Little did I realize that as soon as we were done with the portfolio buildup, we would find that over 50% of our portfolio would be startups that cater to other small businesses or enterprises with all variants of SaaS and traditional enterprise sales models thrown in there. I would argue there isn’t as much variety in a B2B portfolio in Indian VC over the last 5 years as in Blume Fund I.

Here come the B2B hotsteppers

That article was not far from reality. Club it with the relative lack of depth in the Indian Series A and Series B ecosystem and SaaS/Enterprise was so not-cool to invest in. That creates the environment for the above article to be the perfect self-fulfilling prophesy in the country. Everyone’s issue or concern is the same – can we build a “unicorn” in this space? India should not be a Unicorn hunting country in my opinion – it’s a futile exercise for most – but should be a nation spotting Blu Swans (our internal moniker for the 1000cr+ of Value Creation “Hits” that we should engineer the Indian ecosystem for) – but that’s coming in a separate blog topic. The issue with B2B companies is that even the best of them look like Blu Swans upto Series A/B and less like Unicorns. (Yes, in Jan 2016! How terrifying, no?!) – it’s a different matter that the best of these Blu Swans will eventually migrate to Unicorn status.

Our counter to Dev’s post then was that it won’t be long before we start delivering the $1 mill ARR startups – we already felt bullish back then about a few.

Despite the single-minded VC hunt for the B2C Unicorns that begin Q2 2014, most of these B2B plays in our portfolio and outside of it (Accel and Nexus amongst others can attest to this) refused to give up. Apart from the usual suspects of Freshdesk, Knowlarity, Capillary and Dhruva, there were almost NO examples of >$100 million valuations in this space [at least for companies started post 2010-11]. Let’s add Delhivery, EcommExpress and Grey Orange from the Logistics space given that we’re talking the entire gamut of B2B; and similarly, Citrus, Pine, Prizm and some upcoming payment startups.

Despite the lack of funding and the ramps for rapid growth that were (unfairly) not provided to some great teams and fantastic early traction in the B2B space, this Blume B2B portfolio has kept us happy in the old-fashioned way.

Just from the Blume portfolio, in the last 12 months, we’ve seen

  • more than 10 companies bootstrapped post initial rounds + bridges of $200K to $1 mill (cumulatively over life of the company)
  • over 10 companies in the $1 mill to $5 mill ARR range
  • about 4 of these paid “income” taxes in March 2015, if anyone remembers the concept of income.
  • almost all of them including even “so-called-commoditized” businesses like E2E and Exotel show very impressive gross margins
  • all of them are yet showing 5-10% monthly growth despite ZERO outside capital
  • a few of them are even fuelling growth through traditional channels of debt where capex or working capital is involved
  • team sizes have almost doubled every year
  • some of them are past the traditional Series A mark (not that its any easier to go straight to a Series B like larger round in this country for B2B/B2SME)
  • Zipdial and Promptec were both acquired this year by some of the best companies that could’ve possibly acquired them – Twitter and Havells respectively.

In H2 2015 alone, GOR announced a $30 mill round, CCS announced a >$5 mill round, there are a couple of unannounced Series A’s and there are suddenly 3-4 companies in various stages of term sheets/documentation for very healthy Series A’s and one Series B.

Zaraa baaju, here come the B2B hotsteppers!



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