Post four months of leading $10 Mn Series D funding round in MSwipe, Facebook Co-founder Eduardo Saverin’s B Capital has added another Indian startup to its portfolio – the Mumbai-based B2B online marketplace Bizongo (Business On-The-Go).
B Capital along with International Finance Corporation (IFC) has led $22 Mn Series B funding round in Bizongo, in participation with the existing investors, Accel Partners and IDG Ventures. With this funding round, Bizongo aims to focus on advancing its technology platform and design functions, as well as strengthen its teams across cities.
Founded in 2015 by IIT graduates Aniket Deb, Sachin Agrawal and Ankit Tomar, Bizongo is a B2B online marketplace offering industry packaging supplies for sectors such as ecommerce, retail, restaurant and hospitality, FMCG, Pharma, industrial logistics, food and beverage.
“But essentially, we are a one-stop technological platform for enterprises packaging solutions. We aim to provide an end-to-end tech enabled solution and essentially act as an enabler between the buyers and the suppliers,” shared Aniket in a recent interaction with Inc42.
Kabir Narang, Partner and Co-lead for Asia investments at B Capital, said, “Finding the right solution in India’s $40 Bn packaging market with over 30,000 vendors is time consuming – Bizongo makes the process easy by leveraging an in-house design studio, a curated marketplace of over 200 manufacturers and innovative supply chain technology. We are excited to be backing Bizongo and look forward to leveraging our global network of corporate leaders to accelerate growth.”
The B2B online marketplace had raised Series A funding of $3 Mn in November 2016 to expand their seller base and serve pan-India demand in a better fashion. So far, Bizongo has raised an amount of $25 Mn funding.
Bizongo’s Number Crunch. Take A Look!
From Series A To Series B: What Changed At The B2B Online Marketplace Bizongo
As Aniket reminisced, since they last raised funding, they have now entered much deeper into the segment vertically with a target of continuously evolving their B2B solution. “By November 2016, we knew the packaging is a lucrative category but haven’t defined our buyer segment till then. Once we did that, we realised the exact product requirements of each segment and how we can customise our solutions as per their requirements,” he added.
This helped the startup in focussing its resources well and increased the client engagement on a month-on-month as well as a week-on-week basis. As of now, the startup claims to have a repeat order rate of 60-70% M-o-M. The startup is operationally profitable driving its major revenue through ecommerce, FMCG and retail sectors claim to see an overall break-even by 2020.
“Our value proposition lies today in the fact that we have developed a model from our own learning without copying or borrowing from any other models,” said Aniket.
Leveraging Tech To Cater Packaging Industry Loopholes
An entire packaging industry in India is governed by 30K to 40K sellers. Thus, as Aniket said, “In order to offer a qualitative solution, it was first necessary to define our target market and create a data-driven business model.”
On the sellers’ side, the B2B online marketplace caters to SME suppliers and provides them with reliable working capital solutions, wherein the seller does not have to deal with multiple points of contacts at different organisations and, instead, is able to concentrate and focus on the manufacturing processes. This substantially solves the working capital deficiency that SMEs face in India in the packaging industry.
Further, at Bizongo, they have developed a metric of large and very large enterprises having an annual turnover in the range of $3 Mn (INR 20 Cr) to $75 Mn (INR 500 Cr) and beyond. “We basically don’t cater for businesses with an annual turnover of less than $3 Mn ( INR 20 Cr).”
With this demarcation, Bizongo first created its own encyclopedia of sellers. “So we know which are the top sellers selling in different cities such as Delhi, Bengaluru, Ahmedabad, Mumbai amongst others. This further helps us in approaching different industries and fulfilling their packaging needs as well as drive good revenues for our partner sellers.”
Once Bizongo team sets the product requirements of an enterprise, the pricing is then fed to its platform, where tech comes into play. As Aniket explained, “Our technology is essentially two-fold, for buyers and sellers. Once we articulate the buyers packaging need, we pass it into our system. We then allow the sellers to bid and accordingly send our quotation to buyers with 13-14% mark up prices. For buyers, we build an enterprise login where they can log in and check the packaging solutions, pricing, tracking of orders, payments and more.”
Tackling Big Players Like Amazon, Tolexo And Walmart
According to IBEF, the Indian ecommerce market is expected to grow to $188 Bn by 2025, while India’s hyperlocal market is expected to reach INR 2,306 Cr by 2020. This makes a clear opportunity for the companies engaged in providing industry packaging supplies such as Tolexo, Moglix, BazarA2Z, Alliedhunt, Walmart’s BestPriceWholesale.co.in and Amazon’s B2B portal Amazonbusiness.in.
“However, outdated practices like quality breaches, large capital cycles, poor standardisation, lack of customisation and no benchmarking are hampering growth and slowing down lead times for companies. The entire lifecycle of packaging from designing and developing to procuring, has been riddled with loopholes, where Bizongo’s tech platform is giving it an edge over the existing players,” said Aniket.
He further explained that a broad way in which the B2B space can be segmented is ‘Commodity’, where players like Power2SME are functioning and ‘Non-Commodity’, which is further divided into branded and non-branded.
“Branded segment has products like tools and machinery, where a platform providing a good supply chain like Tolexo or Amazon can excel. For unbranded it is not true. We had to devise an entire set up and nothing is readymade. Everything here is articulated on the basis of needs of enterprises and an end to end support is given to both ends – the buyer and the supplier,” added Aniket.
The Road Ahead
The packaging industry in India is predicted to grow by more than 18% CAGR currently. Bizongo, with an exponential growth of 30x is currently managing and procuring packaging for leading brands like Myntra, Bunge, TataCliq, Firstcry and many more.
The startup further claims to have over 2,500 registered SMEs allowing small players to integrate into the market with professional expertise, shorter working capital cycles and incremental demands, eventually witnessing an increase in the capacity utilisation of these SMEs by 20%.
As Aniket aptly describes, “ When Bizongo was started, our vision was to empower businesses using technology by building a sustainable ecosystem. This vision has culminated into what Bizongo is today. With investment from B-Capital, we look forward to leveraging their expertise in the South East Asian markets which will help us in our journey to scale up. On the other hand, IFC’s interest in the B2B e-commerce space and their deep network in the financial ecosystem will only help us refine our model further.”