Inside IndiaMART’s $100M bet on nine startups in FY22


NEW DELHI : IndiaMART InterMESH Ltd, one of India’s oldest internet companies, has been actively investing in startups since its listing in 2019. In this fiscal year 2021-22 alone, the business-to-business (B2B) marketplace has invested over $100 million in nine companies. One of the deals involved a 100% acquisition of the accounting software company Busy Infotech Pvt. Ltd for 500 crore in his biggest deal yet.

A beneficiary of venture capital and private equity investors such as Amadeus Capital and WestBridge Capital before it went public, Noida-based IndiaMART has made 11 investments worth more than 950 crore since its listing.

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The starting game

“After being listed in July 2019, we considered expanding the IndiaMART ecosystem,” Dinesh Agarwal, co-founder and chief executive officer of IndiaMART, told VCCircle in a virtual interaction.

A closer look at the company’s 11 investments reveals that it is looking to expand horizontally at a time when competition in the online B2B e-commerce space has increased from new-age tech companies like Udaan, Zetwerk and Moglix, among others bagged significant venture capital over the past three years and is rapidly expanding across the country.

However, Agarwal noted that IndiaMART is different from the new age companies and investing in startups not because of the competition from them. “I don’t diversify because I have competition there. I’m just saying that capital allocation is an important aspect to always keep in mind because I’m generating a good amount of cash,” he added.

Agarwal said that IndiaMART’s investments have primarily been made in companies that cater to the three sectors of accounting and finance, marketing and logistics, providing business facilitation solutions. As of now, the accounting division has cornered the largest share of IndiaMART’s investments at over 600 crore across three companies.

In September 2019, the Company acquired a 26 percent stake in Simply Vyapar Pvt. Ltd, marking his first bet in the accounting field. Vyapar offers a GST (Goods and Services Tax) billing, accounting and inventory management product for small businesses to help them digitize their business operations and claims to have over 100,000 paying customers for its product. In January this year, IndiaMART made a follow-up investment in the company. It currently holds a 27% stake in Vyapar and has invested to date 92.75 crore in it.

“For as long as I’ve known computers, they’ve been used primarily for business accounting. So this is the first need of every business. As 2015-16 saw the transition from desktop computing to mobile computing or mobile smartphones, I was looking for a company that was more mobile-friendly in accounting and that is why I invested in Vyapar,” said Agarwal.

IndiaMART has made its second accounting bet on EasyeEcomm, a platform that offers ready-made integrations with major e-commerce platforms like Flipkart and Amazon, webshop providers like Shopify, Zepo and StoreHippo, and logistics providers like Delhivery and Bluedart. IndiaMART invests 13.35 crore for a 26% stake in EasyEcomm. In January of this year, the company acquired a 100% interest in Busy Infotech Pvt. Ltd for 500 crores. Busy, founded in 1997, offers an accounting software platform.

“This (the acquisitions) expands our ecosystem. Nowadays, not everyone wants an online marketing lead chain like IndiaMART, but everyone wants some kind of accounting solution and that expands our base,” added Agarwal. Agarwal went on to say he was confident that these investments would help IndiaMART grow in get more customers in the future.

Accounting aside, IndiaMART has invested heavily in logistic companies by making investment worthwhile 154.85 crore in no fewer than five companies to date.

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