After nearly a decade of e-commerce and ride-hailing dominating the ecosystem, business-to-business, or B2B, startups in India are finally having their day in the sun.
Nearly half the firms founded in the country in 2017 operate in the B2B space, according to report by IT industry lobby Nasscom and consulting firm Zinnov released on November 2. In all, B2B startups now make up around 40% of the Indian startup ecosystem.
“The growth of B2B startups is being driven by fintech, health tech, and B2B enterprise products,” the report said. The trend is supported by an increase in the adoption of advanced technologies, including analytics, artificial intelligence, the internet of things, augmented reality, and blockchain.
With such prolific growth, the B2B segment has also caught the attention of investors.
Within the B2B space, fintech startups and health tech companies are showing strong growth. In the fintech space, digital payments and lending are expanding steadily, alongside several new companies in insurance tech and wealth management.
In health tech, companies that offer health information management are gaining traction, followed by new areas such as anomaly detection, disease monitoring, and telemedicine.
So far in 2017, India has added 1,000 new startups, taking the total to over 5,000, the report said.
The country continues to be the world’s third largest startup ecosystem after the United States and Israel, though it is catching up to the latter. India now has 10 unicorns, compared to just three in Israel. The average valuation of unicorns here is $1.6 billion, slightly higher than $1.2 billion in Israel.
The total funding for Indian startups during January-June 2017 was $6.4 billion, way higher than just $2.4 billion in the corresponding period last year. But the increase was mainly because of massive funds raised by e-commerce major Flipkart and digital payments firm Paytm. In April, Flipkart raised $1.4 billion from eBay, Microsoft, and Tencent. A month later, Paytm raised $1.4 billion from Japan’s Softbank.
This article first appeared on Quartz.