How to 'Solv' the Issues Impeding India's MSME Sector
Bengaluru-based Solv's B2B commerce platform claims to offer micro, small and medium enterprises an open and inclusive trade ecosystem across the complete value chain
"Life is a string of failures but the latter are often followed by unprecedented periods of growth," shares Amit Bansal, who is the chief executive officer at Solv, a Bengaluru-based startup that aims to accelerate the growth of micro, small and medium enterprises (MSMEs) in India. Bansal's sage advice is as useful for small businesses as for those working to empower them.
According to estimates, the Indian MSME sector's contribution to the national GDP is no more than 28 to 30 per cent despite the country being one of the largest MSME hubs in the world after China. Solv was launched with a desire to understand the challenges responsible for this conundrum. "We spoke to over 3,000 MSMEs from various sectors across India and realized that the most pressing problem for them was to expand their business beyond first or second degree connections due to a lack of trust, timely credit and avenues to scale their business rapidly with technology," explains Bansal.
Solv's B2B commerce platform claims to offer the MSME sector an open and inclusive trade ecosystem across the complete value chain by facilitating connections and negotiations with verified sellers and buyers, doorstep pick-up and delivery of goods, timely and easy access to finance as well as simplified business support functions. Last month, the company raised $40 million in a Series A round led by Japan-headquartered SBI Holdings. It plans to hold the Series B round over the next six to nine months. In the current funding winter, conversations with investors have quickly switched to revenues, unit economics and path to profitability. Solv, however, claims to view the shift positively, citing its prudent approach to business from the start.
According to recent reports, the B2B e-commerce market in India is expected to reach over $1 trillion by 2024. How does Solv perceive the sector's potential? "B2B e-commerce is a very large opportunity, and the evolution is more recent (three to five years). In a short span of 18 months of operation, we have become a reliable partner for over 250,000 MSMEs in the country. During H1 2021, when supply chains to MSMEs were severely disrupted, Solv continued to serve the small retailers and deliver goods at their doorstep before 6 AM," asserts Bansal, adding, "We have registered a 10-fold growth in transactions over the last 18 months."
Bansal, of course, credits this impressive growth to the Solv team's ability to take risks without the fear of failure: "This ability diminishes with every passing decade. One is never ready when great shots present themselves, it is about taking those shots and the success rate improves 'overnight' over the years." Indeed, the Solv CEO is right. As hockey Hall of Famer Wayne Gretzky once said, you miss 100 per cent of the shots you don't take. Amen to that, we say!