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Winning last made R Narayan and his startup Power2SME one of the only profitable startups in India’s B2B space

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Winning last made R Narayan and his startup Power2SME one of the only profitable startups in India’s B2B space

Having set up one of India’s only profit making B2B startups, R Narayan is strongly of the opinion that a company’s life expectancy is a minimum of 200 years and according to him, the entrepreneur should stand to win only after all sides in an equation have won.

While working in corporates for about a decade, R Narayan realised he could execute his thoughts well – thus began the idea of starting up his own firm. Being that his execution game was on point, today he is the founder of two successful companies – Denave and Power2SME.

When Denave was incorporated in 1999, the company focused more on helping their clientelle find SME customers and that is where Narayan began to see the parity – or the lack of it – between an SME and enterprises. This is where he decided to work on bridging the transition which brought about Power2SME.

Power2SME operates like a buying club, wherein it offers information and tools that enable SMEs to reduce the costs of their procurement. Operating within several industries, including construction, manufacturing and engineering among others, they accept twenty-four-seven orders and enables doorstep delivery of goods with flexible payment options. With a seed capital of Rs. 2 crore, Power2SME was founded in January 2012 and is operated by Gurgaon-based BEBB India Pvt. Ltd.



With investors including International Finance Corporation (IFC), Kalaari Capital, Accel Partners, Inventus Capital Partners and Nandan Nilekani, co-founder of Infosys and former UIDAI chairman, the Gurgaon-based startup has successfully completed five rounds of funding. In June 2012, it raised series A funding of $ 2 million, followed by a series B round of $6 million a year later. This was followed up by a series C in July, 2014 of $7 million followed by an undisclosed amount in series D in 2015 and a whopping $36 million in May 2016’s series E round of funding.

In April of this year, Temasek’s venture debt arm InnoVen Capital committed another Rs. 40 crore to Power2SME and also stated that it would support the company’s working capital needs through their partner financial institutions.

India is home to more than 40 million registered and unregistered SMEs, which makes up a staggering 95% of all industrial units in the country. About 45% of the total Indian manufacturing output and 40% of total exports come from India’s SMEs. While this may sound lucrative and hold a lot of potential, there is no shortage of competitors in the SME servicing space – from financial to raw materials and beyond.

However, Power2SME is one of India’s few profit-making companies in the B2B space. Their customer-repeat rates are about 80-85% and while margins maybe small, the volumes make up for it. In first-time transactions with new customers, Power2SME makes a profit that is twice the customer acquisition costs and for repeat transactions their profitability goes up to around 60 times the retention cost.

The company has also developed a platform to enable an easy connect between SMEs and financial institutes called FinanSME. In addition, they also have SMEshops to address the growing needs of MRO goods – Maintenance, Repair and Operations goods.

Having experienced the corporate life for a decade, Narayan feels that entrepreneurship could get lonely. However, that problem, for him, was solved when two colleagues of his – from Microsoft – joined him. “The intelligentsia started happening again,” he says, adding, “since then it’s been a dream run – I’ve just been lucky, I guess.”

Aside from luck, ask Mr. Narayan what his mantra to success is and he says, “If you do the right things, you will succeed.” He believes that there is no timeline to ‘making it’ and adds that some may hit success in six months while others could take years. Contrary to popular opinion, he does not believe in the theory of failure being a stepping stone to success, “Just because you’ve failed two times, it does not guarantee you success the third time. It’s finally what you have built.”

Having set up one of India’s only profit making B2B startups, R Narayan is strongly of the opinion that a company’s life expectancy is a minimum of 200 years and according to him, the entrepreneur should stand to win only after all sides in an equation have won, “You can’t think about you winning, you should win last.”


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