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The current economic climate is proving to be a challenging time for everyone. Rising inflation and constant worry about the state of the economy are on the back of people’s minds, and consumers are tightening their belts and cutting back on spending, especially on discretionary items.
Case in point: I recently decided against buying a handbag I’ve been eyeing for a while.
This situation makes things pretty tough for B2C firms, with their target audience being tight-fisted with their cash. On the other hand, businesses present a different kind of opportunity – which is why B2B firms may come out ahead in this time of economic crisis.
That’s what Singapore-based VC firm Tin Men Capital believes, with today’s featured story focusing on how it’s navigating the current downturn.
Today we look at:
- Tin Men Capital’s B2B focus
- A South Korean digital lender that’s bagged some bucks
- Other newsy highlights such as layoffs at Microsoft and the new general manager of Gojek Vietnam
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Follow the yellow brick road
Image credit: Timmy Loen
This period of economic uncertainty is a challenging time for B2C firms. After all, they’re reliant on customer demand, which in turn fluctuates based on consumer sentiment and the state of the broader economy.
According to Tin Men Capital, this means that B2B startups have an edge over B2C firms in the ongoing funding winter. We spoke with co-founder Murli Ravi to find out more about the VC firm’s strategy.
- Building up: Ravi said that Tin Men Capital focuses on B2B companies that cater to “enterprise customers with large annual contract values.” While the sales cycles for these types of clients are long, they tend to be more resilient to shocks as enterprise customers are often more willing to pay fees upfront.
- R is for revenue: B2C firms “need to expend large amounts of capital on user acquisition at exactly the wrong time,” says Ravi. In contrast, B2B firms can “generate revenue earlier in their life cycle” and they’re able to do so with less churn, making them more exciting prospects for investors.
- Future plans: Tin Men Capital recently said that its new fund will disburse capital to between 10 and 15 series A investments. Its focus on enterprise software means that the firm is generally bullish on Singapore, although it also sees opportunities forB2B startups in Indonesia, Vietnam, and the Philippines that are focused on their own markets.
Read more: Recession Run: B2B startups have an edge over B2C, says Tin Men Capital
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