Power2SME, the first 'Buying Club' for SMEs in India, today announced that it has raised USD 6 million in Series B funding from their existing investors. The funding round was led by Accel Partners with participation from Kalaari Capital and Inventus Capital. The funding will help Power2SME to scale up their current business by extending its footprint to South India, increase their product portfolio, expand their sourcing channels to include direct imports for their SME customers and make additional investment in technology & marketing.
Announcing the recent round of funding, Mr. R. Narayan, Founder & CEO, Power2SME said, "Power2SME's aim to help unlock the potential of SMEs, whose progress is so critical to the India growth story. We believe that the power of the SME sector is largely untapped and holds great potential. Power2SME aims to help the SMEs to improve their efficiency and provide a significant lever for growth and profitability. With quarterly revenues run rate of more than $2 million and 13,000 registered SMEs users in less than 3 quarters of operations, Power2SME is well on its way to becoming a one stop destination for SMEs for all their business needs."
Also read: Understanding modified duration in debt mutual funds
"We believe that the limited size and the inefficiency in negotiation capabilities hamper the ability of the SMEs to get optimum procurement prices. Power2SME enables the SMEs to source the products at a competitive price ensuring significant savings. Buying Club for SMEs' raw material 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. The business model of Power2SME sustains the ability to grow and expand with the ability to cater SMEs across multiple sectors," said Mahendran Balachandran of Accel Partners.
"The emergence of e-commerce in the B2B marketplace and the changing SME behaviour enables a very significant market opportunity. Power2SME is the first company to capitalise this, they are one of India's fastest growing businesses in this space. The high satisfaction level of their SME customers is testimony to the excellent service that the company provides. We saw immense potential in their business model and lead by Narayan the leadership team is stellar to deliver a highly scalable company" said Vani Kola, MD, Kalaari Capital.
"SMEs are operating on low margins and don’t have enough capital to spend on R&D. The extra money they generate after dealing with Power2SME can be utilized to drive sales and marketing initiatives for the SMEs, and more importantly can be invested in R&D. Power2SME is truly a trend-setter in the B2B business and capable of becoming a game changer for SMEs in India," said Parag Dhol, MD, Inventus Capital.
Power2SME’s mission is to "Empower SMEs to enable the India growth story”. It has an innovative business model which enables the small and medium enterprises to obtain the most optimal pricing for their procurement needs. The company pools the demand of hundreds of SMEs for multiple products for their business needs, thus allowing it to not only obtain the most optimal pricing but also a larger pool of quality suppliers. It buys directly from the manufacturer and sells to the SME directly, cutting out the middle link of distributors and wholesalers. The services on offer go beyond being a match making platform. Power2SME takes complete ownership of the entire order process, including taking title of the goods and ensures quality of the raw material at the best price available to SMEs. Their team comprises of experienced and specialized professionals that negotiate the prices directly with manufacturers and can obtain prices that are significantly lower than the standard market prices. It also provides an online platform that is available to its SME customers and can be accessed without any charges. The portal allows the SMEs to track all their purchases as well as undertake transactional activity such as placing new enquiries, checking price quotes submitted by Power2SME, creating/uploading purchase orders, checking status of delivery, account statement, notification of payment due etc. Power2SME has SME clients with turnover ranging from Rs 5 crores to Rs 250 crores and works with established suppliers which include Indian Oil, Arcelor-Mittal, SAIL, GAIL, Haldia Petrochemicals amongst several others. For more information, visit http://www.Power2SME.com. You can also follow the company on LinkedIn (http://www.linkedin.com/company/power2sme) and Twitter (https://twitter.com/power2sme)
Inventus Capital Partners
Inventus Capital Partners is a US-India venture firm managed by successful entrepreneurs and industry operating veterans who have backed over 100 entrepreneurs with operations in India and/or Silicon Valley. Inventus backs entrepreneurs first and foremost. The companies financed by Inventus include TELiBrahma, Insta Health, redBus (acquired by MIH), FundsIndia, Vizury, Sokrati, eTechies, Cbazaar, Savaari, Power2sme, Policybazaar and eDreams. Inventus is currently investing out of its recently raised Fund-II. More information about Inventus is available at www.inventuscap.com.
Kalaari Capital is a $160 million venture capital fund with a strong advisory team in Bangalore investing in early-stage, technology-oriented companies in India. Kalaari Capital is passionate about investing in entrepreneurs who are poised to be tomorrow's global leaders. Kalaari Capital seeks companies that are capturing new markets, providing innovative solutions, and creating new wealth for India and beyond. Kalaari Capital is India’s leading investor in early-stage businesses, nurturing them through every aspect of growth on the transformative journey toward success. More information about Kalaari is available at http://www.kalaari.com
Founded in 1983, Accel Partners has a long history of partnering with outstanding entrepreneurs and management teams to build world-class businesses. Accel today invests globally using dedicated teams and market-specific strategies for local geographies, with offices in Palo Alto, California, New York City, London and Bangalore, as well as in China via its partnership with IDG-Accel. Accel has helped entrepreneurs build over 300 successful companies, many of which have defined their categories, In India, Accel has made investments in companies such as Ace Creative Learning, Babyoye, Collectabillia, EduPristine, enStage, Flipkart, Forus, FreshDesk, HealthcareMagic, Kirusa, Mitra Biotech, MuSigma, Myntra, Perfint, Probe, PropTiger, QwikCilver, SureWaves, Trivone, Vinculum and Virident.