Private labels, public hopes: B2B’s next act in India

After nearly two years of stagnation, shutdowns, and valuation cuts, India’s B2B ecommerce scene is showing signs of revival. Udaan and Jumbotail – two of the sector’s biggest players – have regained investor interest.

Earlier this month, Udaan raised US$114 million in a series G round, while Jumbotail is reportedly in the final stages of securing US$120 million to become India’s next unicorn.

Photo credit: Jumbotail

This resurgence, however, is not just about capital as both companies are also making bold consolidation bets.

In March, Jumbotail acquired B2B marketplace Solv in a US$50 million deal. Meanwhile, Udaan is in talks to buy ShopKirana, a regional B2B player focused on Tier 2 and Tier 3 cities, a source with knowledge of the development told Tech in Asia.

See also: Ula, Udaan’s struggles cast shadow on B2B ecommerce’s future

This flurry of activity marks a dramatic shift for the sector, which has been grappling with low investor confidence and stalled growth. Even the best-funded firms had difficulty making their models work.

Udaan’s valuation was slashed by nearly 50%, while ShopX filed for insolvency as it could not generate “enough cash flow.” According to Tracxn data, there are 785 deadpooled B2B ecommerce companies in India.

Even in Southeast Asia, Jeff Bezos-backed Ula and Vietnam-based Telio have closed down.

Existing investors hang on

So what’s driving renewed investor confidence in India’s B2B startups?

This is not a gold rush, industry insiders tell Tech in Asia. Instead, it is a cautious reentry led mostly by existing backers trying to protect their investment in these companies.

For instance, Udaan’s series G fundraise in May was headed by M&G Investments and Lightspeed Venture Partners. While UK-based M&G began pouring money into the startup in 2023, Lightspeed has been an investor since Udaan’s series A round in 2016.

The California-based VC firm has injected over US$857.5 million to date and holds a 30% stake in the startup, per Tracxn data shared with Tech in Asia.

Private-label play for profitability

Shifting strategy – again