Flavour of the season

Did you know that India’s first unicorn was a B2B start-up? In 2011, InMobi entered the elusive unicorn club. Then, it was more of a one-hit wonder because investors soon turned all their attention to B2C start-ups. B2B start-ups were relegated to the shadows as investors were busy writing fat cheques to justify valuations at consumer tech firms, which in turn, were literally burning money to acquire customers and scale faster to join the coveted unicorn club.

In 2016, the stars started to align for B2B start-ups. While Jio’s cheap data plans got everyone on the internet, the controversial demonetisation forced merchants towards digital payments. In 2017, GST eased transporting goods across the country and brought order to an unorganised sector. Despite the chaos, these changes served as a catalyst for many B2B start-ups that were fixing the supply chain, logistics or building marketplaces to connect buyers and sellers. Investors found their new love and the once unglamorous B2B start-ups started to look a lot prettier.

But here is the catch — some of them are following the B2C playbook. With no revenue model in place, they are using investor money to convince merchants to get on the platform. The challenge for these firms will be whether these freebie customers will pay for services later and whether investors will continue to bankroll them till then. Making things tougher for them will be the entry of Reliance, which is starting to make inroads into the B2B space with JioMart. Its foray into telecom threw up some large casualties and we could see a repeat in the B2B space. Is the euphoria around B2B start-ups justified or is it yet another bubble waiting to burst? Read our cover story to know more.

In other stories, there is an investing feature on IndusInd Bank. With the economy slowing, not only has credit growth tapered, there is also the specter of fresh bad loans. Investors are looking forward to a smooth change of guard at the bank but are optimistic and cautious in equal measure.