Investments in E-commerce: A Closer Look at the Top Investors
I explained in my previous post that there are 5 popular e-commerce business models, namely:
• B2C
• E-commerce Enabling
• B2B
• Cross Border Commerce
• Social Commerce
See here — Understanding the E-commerce Landscape & Investment
Now let us take a closer look at the top investors in each e-commerce business model.
Venture Capitalists are the most active in the B2C e-commerce space
Venture Capital funds are the most active investors in B2C e-commerce. Tiger Global Management, a US-based VC founded in 2001, leads the pack with 12 investments in online marketplaces worldwide, such as Flipkart (India), JD.com (China), Souq (UAE), Shopclues (India), Urban Touch (India), Dinomarket (Indonesia), Wikimart (Russia), and Avenida.com (Argentina), to name a few.
Sequoia Capital, another US-based VC fund, is also an active investor in this space, with 10 investments in total. Sequoia has invested in online marketplaces like Youdi Internet (China), Shopo (India), Zilingo (Singapore), BulBul (India), Sweet Couch (India), Maimaibao (China), Happigo (China), Coupang (South Korea), Tokopedia (Indonesia), and JD.com (China).
Apart from VC funds, Start-up Chile, an accelerator established in 2010, is also a prominent investor with 9 investments. Most of their investments are in Chile and Latin America. Start-up Chile’s investment includes Rendalo (Chile) and Design With Benefit (US).
Among the PE investors in B2C E-commerce are Summit Partners, Goldman Sachs, and Singapore-based Temasek. eBay has also made some notable investments as a corporate investor with Qoo10, Paytm, Snapdeal and Flipkart.
While most of the top investors come from the US, Tengelmann Ventures and HV Capital are based out of Germany, Naspers is in South African VC, DST Global is in Russia, and East Ventures is in Japan.
Top investors in e-commerce enablers are based out of the US
Unlike B2C e-commerce, top investors in e-commerce enabling are more diverse with a combination of VCs, accelerators, family offices & debt funds.
With 103 investments, the US-based accelerator Plug and Play Tech Center is the topmost investor in e-commerce enabling. Most of their enablers portfolio includes software solutions like Onfido (UK), Project44 (US), and Bolt (US), and fulfillment providers like Fabric (Israel) and Bigblue (France).
Other notable VC investors in this space are Y-combinator, 500 Startups, SV Angel, SAP.iO, Right Side Capital Management, FJ Labs, Accel, and Sequoia Capital — all based in the US.
There are several accelerators interested in e-commerce enabling. Most are headquartered in the US, such as Techstars, MassChallenge, and VentureOut. The few outside the US are Startupbootcamp, based in the UK, and Start-Up Chile, based in Chile.
There is one family office that is very active in this space. Kima Ventures, a family office of Xavier Niel is based in France and was established in 2010. Kima Ventures has made close to 21 investments, mostly on software solutions such as Front (US), Akeneo (France), and Gorgias (US), and e-commerce support services such as Lengow (France) and Easyship (China).
There is also a debt fund that made it to the list. Western Technology Investment, a US-based debt fund established in 1980, invested in 19 e-commerce enablers. Some noteworthy mentions are their US investment, like Thrasio, Coremetrics (acquired), ShipBob, AdRoll, and Monetate.
The top investors in B2B E-commerce are based out of the US & China
All the top investors in B2B e-commerce are based out of the US & China. Y Combinator, a US-based VC, is a top investor in B2B e-commerce with a total of 34 investments. Its portfolio includes B2B marketplaces and software solutions like Faire (US), EquipmentShare (US), 6sense (US), and Cheetah (US), and Frubana (Colombia).
Some of the top VC funds are 500 Startups, Sequoia Capital, FJ Labs, and Tiger Global Management. The top accelerators are Techstars, Plug and Play Tech Center, Mass Challenge, and GIST Network.
The top Chinese VC funds in the list limit most of their B2B e-commerce investment inside China. For example, Matrix Partners China is the leading investor with a total of 13 investments, mostly in Chinese online B2B platforms like Zhaogang, Cheyipai, Xyb2b, Easy To Point Rent. Zhen Fund has 10 investments in Chinese B2B online platforms and marketplaces like Meican, Zhaogang, Shenzhen Eicang Technology, and YMT.com. And Shunwei Capital has invested in Chinese online B2B platforms like Meican, Huitongda, Casstime, and Easy To Point Rent.
Top Investors in Social Commerce
Social Commerce is a budding business model in e-commerce; thus, fewer investments are made in this space than others. Y Combinator continues to be a top investor even in social commerce with a total of 6 investments, including Meesho (India), Bikayi (India), Mela App (India), and Valienta (Colombia). Other VC funds investing in this space are US-based Sequoia Capital, 500 Startups, and GGV Capital.
AngelList is an angel investor with notable investments in social commerce such as Poshmark (US), DealShare (India), Mall91 (India), and City Mall (India).
Tencent, a Chinese investment holding company, has also invested in this space with portfolio companies including Pinduoduo, Xingshen Community Network Service, Xiaohongshu, and Hao Yiku.
It is important to note that most investments are happening in India and China in social commerce.
Top Investors in Cross Border Commerce
Like social commerce, cross border commerce is still a new sector, and not many investments are made. The top US-based VC funds investing in the space are 500 Startups, Y Combinator, Sequoia Capital, and GGV Capital. Their portfolio includes companies like Lynks (Egypt), Backpack (US), Trusu (China, acquired), Alibaba Group (China), Daling (China), JollyChic (Saudi Arabia), and Xiaohongshu (China).
Some of the China-based VC investors are Zhen Fund, Cherubic Ventures, and IDG Capital. Their portfolio includes Xiaohongshu (China), Club Factory (China), Wandougongzhu (China), Inagora (Japan), Xianlife (China), Floship (China), GDFS (China), and Haojiemi (China).
Switzerland-based PE fund ACE & Company has made 3 investments — Alibaba Group (China), Alibaba, and Edfa3ly (Egypt).
E-commerce will continue to capture the investors’ interest in the following years, with e-commerce players venturing to new markets and countries improving their digital and financial economies, giving the growth rate a much-needed boost for 2020 and 2021.
In the next post, we will discuss how the e-commerce industry has taken the global economy by storm. We will showcase how the industry operates across borders, which countries showcased top e-commerce sales, and explore which new markets will offer great growth potential.
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