Sathya Pramod, Co-founder of Inflection Point Ventures.
Sathya Pramod, Co-founder of Inflection Point Ventures.

Reverse Pitch | ‘The market is ready for smarter business, analytical and lending models’

Many choices are available for consumer loans and also for corporates who have a history and are profitable

There is always some glamour associated with business-to-consumer (B2C) companies. They directly hit the end consumer and generally need to be in their line of vision. However, the ones silently helping corporations and companies deliver are the business-to-business (B2B) companies. In 2018, Freshdesk became the first B2B unicorn from India followed by Udaan, and there are many more waiting in the wings, be it GreyOrange, BharatPe and even Capital Float. According to a report by Zinnov and NetApp, in 2018, B2B startups got $3.7 billion in funding, predominantly in enterprise tech, fintech and healthtech. There are other areas, including software-as-a-service, Internet of Things, customer relationship management, expense management and alternative lending.

However, there are several other B2B areas that are unexplored and need attention. Many choices are available for consumer loans and also for corporates who have a history and are profitable. However, if you look at who needs funding, it is the newer lot of companies without a three-year trend and a history of profitability. The lenders need to come up with algorithms on the basis of cash flow and the quality of the customers to support the new-age companies. Not everyone gets funded by equity and not everyone needs it. If you see why most businesses fail, it is not because of the lack of capital, but lack of working capital. Working capital is hard to find early on and, when you want it to be collateralized, it is almost impossible.

Newer analytical models, smarter business models and lending models need to be innovated. Bill discounting, for example, is an age-old product, but has never seen any kind of innovation. There are firms that have replaced the money-lender to an extent, but the cost is humongous. With data available, there could be newer models, and the market is waiting for them. At Inflection Point Ventures , we will be glad to back firms that are really solving problems for India, because we believe if we can solve for India, we can solve for the world.

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