Marketplaces go vertical

Alibaba saw share prices fall as bad news came with an SEC ruling that is driving worry among investors - under the stress the Chinese e-commerce powerhouse is in, its a good opportunity to step back to have a quick look at the evolution of B2C and B2B marketplaces. 

An interesting way to view B2C marketplaces' is through a matrix containing add-on services on one axis and value chain ownership on the other. Examples such as Craigslist fell into Advertising and Discovery, AirBnB took it one step further with Fee on Transaction and Transaction Enabling, and finally Amazon covers the board with Finance Enabled services and 26 of its brands. 

A critical point of this view is that "generic" marketplaces like Amazon and Alibaba can offer these services to a very wide selection of products mainly because of the simpler nature of B2C transactions, marked by low value and physical volume. When the complexity rises, the difficulty in execution rises exponentially - such as for most B2B value chains. 

High pressure on margins, complex workflows and logistics and increased financing needs are just some of the issues that plague main B2B transactions. In response, to generate more value and capture transactions, B2B marketplaces are also trying to verticalize and cover from procurement to overseeing transactions and coupling services of financing, insurance and logistics - but on much more specific value chains to try and "unlock" the potential of their markets. 

B2B marketplaces are working on these issues, such as Flexport, the $8B freight forwarder expanding to insurance and financing services and OfBusiness, the $5B procurement marketplace stepping into credit lines for businesses. 

Explore our previous report covering the evolution and future of marketplaces. 👈

In the News:

📉 Netflix shares fell 50% since mid-November high. The streaming service had seen a doubled share price since the start of the pandemic with much of the world population stuck at home. With more outside options becoming available, and increased competition from the likes of Apple, Disney and HBO Max, the company's shares fell to pre-pandemic levels this week. - CNBC.

🖼 LimeWire is back, but with NFTs. The 2000's file sharing website, that once had over 50M monthly users, is relaunching as an NFT marketplace in May 2022. The news comes after the company was shut down by a federal court in 2010 over copyright infringement. The platform will focus on music and displaying prices in USD while allowing its users to buy pieces with regular credit cards. - CNET

Select Deals From Last Week:

🇩🇪 2trde, the Munich-based B2B platform for used-vehicles, raised a $7.7M Seed round from Adevinta Ventures, Aster Capital, and Maniv Mobility. The startup enables car sellers to access multiple sales channels simultaneously and in real-time to improve sales results. The investment comes to fuel 2trde's international expansion as they take advantage of the rising used-car market in Europe.

🇩🇪 Forto, the Berlin-based logistics platform, has raised $250M to increase the pace of international expansion and widen its product offering. The startup has around 2,500 clients and is working to expand into Sweden, Belgium, Poland and southern europe through 2022. The round comes after a $240M capital injection mid-2021.

🇮🇳 Byju's, the EdTech marketplace in India, has raised $800M in a round led by its own CEO and investors, BlackRock and Sumeru Ventures. The round values the company at $22B and is aimed at expanding the offered teaching models to students. Until now, the company has served more than 150M students on the platform and reports an annual renewal rate of 86%.

🇺🇸 Best Egg, the US-based personal loan marketplace, raised a $225M Series E to fund its credit card division and expand product reach. The startup has executed over 1.1M loans and last year alone facilitated $4.6B in loans and generated $300M in revenue. 

Other Notable Marketplace Deals From Last Week:

🇧🇷 Grão Direto, the Brazilian AgriTech marketplace, has raised $8M to gain traction to expand into financial credit services for clients.

🇺🇸 Roofstock, the US-based real-estate investment marketplace, has raised $240M to expand product portfolio, team and M&A budget.

🇺🇸 Edly, a NY-based marketplace to connect students and local investors to fund tuition fees, raised $175M to increase its domestic presence.

🇫🇷 +Simple, the Parisian insurance marketplace, has raised over $98M to fund further expansion.

Explore 78 funding rounds of the last week.

Exits:

🇺🇸 MeridianLink has acquired StreetShares, the P2P lending marketplace, to expand its small business lending capabilities.

🇦🇺 ScotPac has acquired Business Fuel, the online fintech lender, to offer online businesses loans in their portfolio.

🇨🇦 Somm has acquired DINR, the last-minute restaurant reservation marketplace, to expand its lifestyle product portfolio.  

Tip of the week

Assessing the growth of a portfolio
Within the Advanced filters for Funding rounds, you can add a filter to see how much funding the portfolio companies have received from the initial investment. This is handy to provide a deeper analysis for the success of accelerators, government grant programs or other investors.

Check out the growth of Y Combinator companies.

Job opportunities

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Ivan Draganov

Senior Innovation Analyst
Dealroom

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