Accel leads $6m investment in India B2B group buy platform
Accel Partners and return backers Kalaari Capital and Inventus Capital have put $6 million into group buying website Power2SME, in a Series B round for the company.
Power2SME aggregates demand for raw materials from small- and medium-sized enterprises (SMEs), negotiates the best prices directly with suppliers and handles payments to them. It cuts out distributors and wholesalers by then selling the materials directly to SMEs and shipping the goods to them.
The company handles multiple products in categories like chemicals and additives, inks, paints, metals, and polymers, dealing with suppliers such as Indian Oil, Arcelor-Mittal, SAIL, GAIL and Haldia Petrochemicals.
Power2SME, which launched in 2012, now generates quarterly revenues of more than $2 million and has 13,000 registered SME users, according to R. Narayan, the company's founder and CEO. It has SME clients with annual turnover of INR50 million ($850,000) to INR2.5 billion.
The funding will help Power2SME extend its footprint to South India, increase its product portfolio, expand sourcing channels to include direct imports for SME customers and make additional investment in technology and marketing.
Mahendran Balachandran, a partner at Accel, said the business model of Power2SME sustains the ability to grow and expand with the ability to cater SMEs across multiple sectors.
"A buying club for SMEs' raw materials is a unique concept and we have not found another similar business model so far. There are several similar concepts globally but they focus on services, not physical goods," he added.
Kalaari and Inventus invested $1.93 million in the company in a Series A round in October 2012.
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