Power2SME aggregates demand from SMEs for most commonly-acquired raw materials and procures and sells these at competitive prices
Power2SME, a group buying platform for small and medium enterprises in India, has secured an additional US$36 million in Series E financing round from exiting investors, including Inventus Capital Partners, Accel India, and Kalaari Capital.
Infosys Co-founder Nandan Nilekani and IFC, a member of the World Bank Group, also co-invested.
Power2SME will use the additional financing to continue geographic expansion, accelerate product growth and innovation, invest in additional sales and marketing resources, and continue evaluating strategic acquisition opportunities.
“Power2SME’s goal is to empower SMEs to reach efficiencies of scale thus driving profitability for them. Our work has been driven by our vision to make SMEs bankable. Our deep networks and relationships with the banking sector and financial institutions helps us to make our SMEs succeed like never before,” said R Narayan, Founder and CEO, Power2SME. “This capital gives us additional resources to expand quickly and strategically into new markets, innovate rapidly, and deliver on our vision.”
Started in 2012, Power2SME is a B2B buying club that aggregates demand from SMEs for most commonly-acquired raw materials (such as steel, polymers, yarns, chemical, etc.) and procures and sells these at competitive prices. Raw material accounts for 70 per cent of the recurring costs of manufacturing SMEs every month.
It also offers FinanSME.com, a platform that connects empaneled lenders with SMEs in order to provide working capital finance at better terms from banks and non-banking financial institutions for purchases on Power2SME. Additionally, its SMEShops.com platform addresses the MRO needs to meet the growing and frequent requirements of SME buyers for consumable industrial goods.
Today Power2SME, operates out of seven offices and 14 states in India and has a current employee strength of 250. It has a registered base of 50,000 SMEs.
“In 2012, we invested in Power2SME because we believed in SME growth story,” said Vani Kola, MD, Kalaari Capital. “Since then, Power2SME has shown proof of concept of its procurement offering as well as its finance offering and has emerged as a leader in its category. For India, SME growth and empowerment will help in bringing up the GDP contribution of the sector to the nation and Power2SME is leading this change from the front. We are committed to helping the team become the dominant player in this market.”
“MSMEs will play a critical role in making India a manufacturing hub; and thereby make the growth process more inclusive. The opportunity for both the government and private players such as Power2SME is large and focused and continued contribution could well bridge financial inclusion for the sector,” added Nilekani.
Micro, small and medium enterprises form a large part of the Indian economy, accounting for 45 per cent of the country’s industrial output and 40 per cent of its exports. There are 48.8 million MSMEs in India, which employ 111 million people. There is critical shortage of long-term funding for the sector. Some estimates put the gap at US$320 billion against a total of demand of US$500 billion.
India has the largest base of SMEs in the world after China, however Indian SMEs contribute only 8-10 per cent to the nation’s GDP as compared to 60 per cent contribution by SMEs in China. This is a huge opportunity for both the government and Industry.
The post Group buying platform Power2SME raises US$36M from Inventus, Accel, others appeared first on e27.
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