Amazon fund to drive India SME digitalization
Amazon has formed a $250 million fund that will invest in India-based small and medium-sized enterprises (SMEs) with a view to supporting nationwide business digitalization.
The Amazon Smbhav Venture Fund is mandated to help entrepreneurs seeking to launch, manage and grow their businesses online, automate and digitize operations, and expand overseas, according to a statement.
Technology is also at the heart of two additional objectives: improving agricultural productivity by making inputs more accessible, providing tailored agronomy solutions, distributing credit and insurance to farmers, and creating supply chain efficiencies; and supporting healthcare through the implementation of telemedicine, artificial intelligence-enabled treatment recommendations, and digitizing healthcare providers.
The fund is part of Amazon’s broader agenda to digitize 10 million SMEs, enabling $10 billion in exports from India, and creating one million jobs by 2025. By the same date, the company wants to bring one million offline retailers and neighborhood stores on to the Amazon India marketplace and bring 50,000 artisans, weavers and small businesses from the country’s eight northeast states online.
Among the first investments from the fund is M1xchange, operator of an invoice discounting marketplace for micro, small and medium-sized enterprises (MSMEs). The company connects banks and financiers to MSMEs, so the latter can assign invoice dues to the former and receive financing at better rates.
The digitalization of India’s SMEs has become a prevalent investment theme. It was a key tenet of Reliance Industries’ nearly INR2 trillion ($26.8 billion) fundraising effort for Jio Platforms and Reliance Retail. Consumers order goods through Jio Platforms and a supporting offline store network, while Reliance Retail helps 20 million small merchants apply technology solutions to their retail processes and supply chain infrastructure.
At the same time, capital is flowing into B2B trading platforms that target SME customers. The likes of OfBusiness, Infra.Market, Zetwerk, and Moglix all offer supply chain marketplaces that are intended to streamline India’s fragmented industrial sectors by providing better access to raw materials, logistics services, and financing.
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