Moglix, a leading B2B e-commerce company specialising in procurement of industrial products, announced on Tuesday that it has raised Rs 28 crore in a Series A round of funding led by Accel Partners with participation from Jungle Ventures and SeedPlus. The startup had previously raised an undisclosed pre-Series A round from Accel Partners and Jungle Ventures in October 2015 and also an undisclosed financial investment from Ratan Tata in February 2016.
Moglix was founded in August 2015 by Rahul Garg, a former Google employee with experience in building global products and running sales across Asia. The startup aims to technologically disrupt the B2B industrial products space for suppliers and buyers across the globe. As a global marketplace, Moglix specialises in B2B procurement of industrial products such as fasteners,industrial electricals and maintenance, repairs, and operations (MRO)-related products. The company claimed that it is witnessing rapid growth. It has partnered with over 1,500 manufacturers and distributors in India, China, Taiwan and other Asian countries to develop an end-to-end procurement marketplace to provide product discovery, price negotiation, logistics, and payment/escrow capabilities.
Moglix currently claims to cater to over 20,000 SME buyers and over 100 large manufacturing houses through their platform.
Moglix currently has over two lakh stock keeping units ( SKU) listed on the platform and serves some of the auto, electrical and PSUs in the country like Lumax, IndiaForge and Indian Oil. Recently, Moglix also became part of the SAP startup studio programme and is working closely with SAP on driving digital acceleration within manufacturing companies.
While B2C e-commerce has gone mainstream in India and is now percolating to Tier 2 and 3 cities, the B2B e-commerce market is estimated to be in its infancy. Talking about the reason behind this, Rahul, CEO of Moglix, noted:
Most of the manufacturing industries in India have remained low on technology adoption, whether it is ERP, procurement, planning, inventory management, etc. The Make in India programme when combined with the digital initiatives in the country have great potential to play a transformative role in India’s manufacturing sector.
Rahul believes that technology could be a strong factor in propelling the efficiency and scale for both procurement and sales of organisations. So Moglix is working with many of these companies to help them adopt technology faster, which could enable them to do tasks 3-5 times faster.
The B2B e-commerce space, though not as well known to the public as B2C e-commerce, has seen a lot of interest from the startup community in recent times. At the beginning of 2016, Power2SME raised a Series D funding from Nandan Nilekani and its existing investors, while competitor Industrybuying recently raised Rs 12 crore in debt financing from Trifecta Capital in January 2016. Then there are players like Tolexo, Bizongo and Omnikart who are active in this sector.
Moglix will be deploying a part of the funds raised to expand its operational footprint across major industrial hubs, increase the SME customer base by over five times to over 100,000 and large manufacturing buyers to over 1,000 in the next 18 months. The startup plans to expand its footprint to South and East India in the coming one year and is targeting $100 million revenue in the next three years. Moglix also recently expanded its operations in West India with the launch of Pune office to cater to manufacturing companies in Gujarat and Maharashtra.
As a part of the deal, Moglix has also added Anurag Srivastava, Founding and Managing Partner of Jungle Ventures, to its advisory board. Anurag brings in his experience in the Asia-Pacific and India region working with startups in technology as well as the manufacturing sector. In his role as an Advisor, Anurag will work with Moglix on product management and devising technology strategy for large manufacturing houses in the automotive industry. Speaking on the investment, Subrata Mitra, Partner, Accel Partners, said:
Currently, medium and large enterprises procure from 100s to 1000s of vendors, and the entire process is run on an ad-hoc basis. Moglix’s ability to induct technology into such a process is innovative and will lead to significant efficiencies. It’s also a large scale issue, and if solved well can create a formidable business.