Business to Business (B2B) start-ups are observing an upward trend in the funding space given the growing demand for backend service support in the business ecosystem, said Mohandas Pai at a panel discussion of ‘BizLab Takeoff 2017’ organised by Airbus BizLab in Bengaluru.
Pai, who is the Co-Founder and a partner at seed and early-stage funding firm Aarin Capital and also the former Chief Financial Officer of Infosys, said that despite difficulties that B2B start-ups have to face in selling to businesses, they are elevating in a “big way”.
Of the total number of start-ups in India, 90 per cent are Business to Consumer (B2C) centric enterprises. Businesses take a long time to get comfortable with new technologies. This makes the task of a B2B start-up way difficult than the B2Cs. Hence, only a 10 per cent come up with B2B models.
“The balance 10 percent, about 2,600 companies all across the country, would be B2B and of them I would expect 1000 companies to be high quality companies,” said Pai.
Aarin Capital has invested in various early stage start-ups based in US and India, including Byju’s, CourseMaster and Vyome Biosciences.
— Airbus BizLab (@airbusbizlab) July 20, 2017
Today India is in the midst of an explosion of entrepreneurial growth and stands as the youngest start-up ecosystem across the globe. After the success in the IT services industries, the nation has over 72 per cent of founders with less than 35 years old in age. With the presence of more than 4,200 start-ups, the country has also become the third largest start-up base worldwide. By registering a growth of 40 per cent in 2015, India has overtaken Israel to become the third largest start-up base after the US and the UK, as per a report published by NASSCOM.
Bengaluru remains the hot destination for entrepreneurs to launch their business and was ranked 15 globally. More than 65 per cent of the start-ups are located in Bengaluru, Mumbai and NCR. Around 26 per cent of India’s start-ups are located in Bengaluru; and NCR and Mumbai had 23 and 17 per cent respectively, as per the report.