New Adevinta Ventures report reveals that B2B Marketplaces outperform other tech segments in VC funding

New Adevinta Ventures report reveals that B2B Marketplaces outperform other tech segments in VC funding

Published: 25-11-2022 09:19:00 | By: Pie Kamau | hits: 3917 | Tags:

Adevinta Ventures, the early-stage investment arm of Adevinta, an online classifieds specialist, is launching a new B2B marketplaces report. The report, developed in partnership with Dealroom - a data provider focused on startup, early-stage, and growth company ecosystems - examines recent trends, segmented performance, and future projections of the marketplace industry.

The report analysed more than 500 marketplace startups across 14 market segments, and showcased several interesting findings, including the continued resilience of B2B marketplaces that outperformed other technology segments. Consumer Goods, Logistics and Lending showed significant strength as the most valuable segments in the industry overall, with a combined enterprise value of US$91 billion. The report also looked at the recent strong track record of growth in the industry, noting that this was likely to continue as opportunities to scale continue and the fundraising market remains relatively buoyant.

The strong resilience of B2B marketplaces has been largely due to long customer lifetime values, better customer retention, and reduced competition in specialised segments. This has resulted in growth within B2B marketplaces over the past year, despite challenging macroeconomic headwinds, with the combined enterprise value increasing by 3%, and only a 10% drop in venture capital funding seen, significantly lower than in other sectors.

The top 500+ marketplaces surveyed in the report, have grown 8.6x since 2015, with a current combined enterprise value of US$214 billion. This growth has been fueled by investor appetite, with venture capital investment in B2B marketplaces growing 450% between H1 2017 and H1 2022, much greater than in other sectors such as fintech, health or transportation. Corporate and corporate venture capital involvement in funding rounds also rose 44% in the same period.

Jordi Iserte, Investment Director,  Adevinta Ventures: “We are very excited about the opportunities ahead in B2B marketplaces and believe that the resilient nature of their business model will see investors double down on them in the near term. Additionally, we have already started witnessing a “B2B-sation” of B2C marketplaces as well as SaaS (Software as a service) companies building their own marketplaces on top. We are confident this trend will only accelerate.”

Geographically, the report also highlighted that more than 60% of marketplace unicorns are based in the United States and China, with both having hosted the most venture capital investment in B2B marketplaces since 2017, at US$19.4 billion and US$9.9 billion respectively. However, Europe has also proved fertile ground for the industry, currently home to eight B2B marketplaces unicorns, a figure that is predicted to rise to double digits in the near future.

Yoram Wijngaarde, CEO and Founder, Dealroom.cod: "The pandemic accelerated long needed digitalisation of legacy industries. As we have now entered another global moment of turmoil, the B2B marketplaces facilitating some of that change are further proving their worth. The tide looks to be turning on momentum bets in the consumer internet, towards the digital plumbing of our stuttering economies. And B2B marketplaces are emerging at a good time."

Moving forward, the outlook for B2B marketplaces looks positive, with expectations that the e-commerce market will grow from US$8 trillion in 2021 to US$26 trillion in 2028. Venture capital funding for B2B marketplaces, while increasing, is still only 19% of the total investment in the sector, indicating significant room for further capital allocation. This is true across a number of segments, for example Consumer Goods, already home to well-known players such as Faire and Udaan, with new clients and industries continuing to emerge. Other areas such as Logistics and Lending show similar opportunities and will only increase as investors continue to realise the value they present.

Read the full report here.

www.adevinta.com
www.dealroom.co