Is there a venture capital drought? Depending on who you talk to (and where), the answer is yes, no, or maybe. Australia has been talking about its own VC disappearance for months, while similar trends have been pinpointed across Latin America and parts of the U.S. this year, too. Meanwhile, the VC community is booming in parts of Europe and India, some analysts say.
How are these trends reflected in the B2B investment space? This week, at least, there was a slump in investment activity. Small business alternative lending saw a bit of a boost with $4.7 billion worth of investments in India and Europe, plus India saw an extra $400,000 in funding from VCs in the SaaS segment. But it was an obscure deal in the U.S. that saw the highest venture capital investment of the week at $50 million for the enterprise mobility arena.
It wasn’t a complete ghost town in startup fundraising, but as autumn begins, we just have to ask: Where have all the VCs gone?
An interesting startup from India managed to secure funds this week when Indian investors jumped Thursday (Sept. 24) at Capabiliti, a local startup that helps companies recruit, train and onboard employees, vendors and clients that operate remotely. Its digital Software-as-a-Service tool allows corporate managers not only to hire new staff and partners on-demand, but also to oversee these hires and monitor their progress. Backers fueled nearly $400,000 into the company, and supporters included Snapdeal co-founders Kunal Bahl and Rohit Bansal, according to reports. According to Capabiliti, it’s already seen more than 700,000 transactions on its site.
Alternative lending saw massive investments at the end of last year, but that excitement has since cooled down. Luckily for these innovators, VCs opened their wallets for the alternative small business financing space – through marketplace lending in one deal, and through factoring in another.
Small businesses looking for financing through an online marketplace in India can do so through BestDealFinance.com, based in India and fresh out of a $3 million Series A funding round led by Kalaari Capital, reports said Tuesday (Sept. 22).
When it comes to B2B startups, the logistics sector has seen some wild attention in recent months from venture capitalists. But the latest funding for BestDealFinance.com shows that investors are interested in more business service segments than delivery.
“Our business model is disbursement focused,” explained BestDealFinance co-founder Manavjeet Singh, according to reports in VC Circle. “In the current market scenario, the customer is confused due to multiple touch points and hassled by a lengthy loan approval and disbursement process.”
The online lending marketplace, Singh added, eases that friction through a matching algorithm to connect SMEs with the appropriate financing. The site is also integrated into banking systems, he said, meaning companies can seamlessly see the funds in their accounts faster.
The factoring sector then saw some attention Thursday when NoviCap, an invoice trading online marketplace, secured $1.7 million in seed funding. The investment was led by Techstars Ventures, whose Managing Partner David Cohen said in a statement that NoviCap impressed venture capitalists and industry players at the recent Barclays FinTech Accelerator event. “We strongly believe in the value of the platform and are excited to see the NoviCap story unfold,” he said.
So far, the NoviCap story means that small- and medium-sized businesses can connect financing for their outstanding invoices through an online portal; reports said firms can generally connect to funds within 48 hours. A pool of investors made up of family offices, corporate investors and others, can purchase the invoices. So far, NoviCap says it has seen a 0 percent default rate on the deals.
“Extended payment terms can have far-reaching consequences for SMEs and the rapid growth of our business validates market demand for an innovative financing solution,” said NoviCap co-founder and CEO Federico Travella in a statement. He added that the funding will help boost NoviCap’s presence across Southern Europe.
It was certainly a slow week, but the largest funding found itself in the U.S. as backers showed their support for the digital enterprise.
On Wednesday (Sept. 23), digital infrastructure management service provider SevOne secured $50 million through its Series C funding round with participation from an array of backers, including Westfield Capital Management, Bain Capital Ventures and others.
The segment of digital enterprise infrastructure is broad, but according to SevOne, the company has secured new financial support at a time when enterprise mobility is coming to the forefront of business owners’ minds.
“Legacy management solutions weren’t built for the mobile economy,” SevOne said in its Wednesday announcement, “and simply can’t provide the power required to deliver real-time insight and business value.” SevOne develops solutions for companies and their mobile carriers to ensure that businesses have the digital infrastructure that can handle mobile operations.
Westfield Capital Management CEO Will Muggia also pointed to SevOne’s data aggregation services as a highlight of the company’s services. “We believe their massively scalable data aggregation platform, which is being used by the world’s largest enterprises and service providers, is highly differentiated and disruptive to the digital infrastructure management market,” he said.
It certainly wasn’t the busiest of weeks, and if the last seven days are any indication, the world may see a bit of a VC slump. But we’re just halfway through the year, and the B2B space is sure to see massive swings — both high and low — when it comes to getting investors to loosen their purse strings.
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