A Field Guide To B2B Marketplaces
In 2020, we released a large content series focused on B2B Marketplaces. We had been investing in the category of companies since our 2014 Transfix investment and wanted to go deep on our thinking and learn from others. We’ve kept up investing in B2B Marketplaces, with portfolio companies like Reibus, Expedi, and VNDLY furthering our themes and ideas. For this series, we covered history lessons from the prior era of companies with a focus on learnings from winners in the B2B Marketplaces category. Next, we interviewed founders who launched companies over the past ten years. Finally, we spoke with several leading B2B Marketplace investors. Below is a compilation of the work. Our aim is to update this periodically to give founders and investors additional perspective.
Aeroxchange. Founded in 2000 this is your classic consortium marketplace focused on aviation. The business is supply chain focused (MRO) and there are a lot of takeaways. It is run today by one of the original employees who has been with the company since 2001.
Alibaba. Founded in 1999 Alibaba has grown from a B2B Marketplace focused on Chinese SMB’s to a tech powerhouse with offerings ranging from cloud computing to financial services. Alibaba is a prime example of how B2B Marketplaces tend to broaden their features and userbase as they mature.
IronPlanet. Founded in 1999 IronPlanet is a B2B marketplace focused on heavy equipment. It is a case study in how marketplaces have found innovative ways to assure the quality of the goods being transacted. IronPlanet was purchased in 2016 by auction powerhouse Ritchie Bros. for $775 million.
Elemica. Founded in 2000 by a consortium of chemicals companies, Elemica is a great example of marketplace participants coming together to create a B2B sales platform and of how marketplaces can expand their offering over time.
uShip. Founded in 2004 by a trio of UT-Austin MBA students, uShip shows how a well-functioning marketplace can be win-win for all participants, and is a great example of how partnerships with more established companies can be really helpful for driving platform adoption.
Conversations With Investors
Robin Dechant (Point Nine Capital). We chatted with Robin about a number of topics and lessons around B2B Marketplaces. Point Nine is a prolific business software investor and Robin and Julia write quite a lot around this concept.
A.J. Rohde (Thoma Bravo). We spoke with A.J. about B2B Marketplaces as an asset class and what factors determine a marketplace’s success. A.J. is a Partner at Thoma Bravo which has been a leader in B2B Marketplace investments (both control and minority).
Fabrice Grinda (FJ Labs). Fabrice spoke with us about some of his own criteria for evaluating marketplaces. He is the co-founder of FJ Labs, an early-stage fund and venture studio, and is among the world’s most active angel/seed investors.
James Currier (NFX Guild). We spoke with James about what he looks for when evaluating new marketplace investments. James is a prolific B2B investor in his role as managing partner of NFX Guild and is also an accomplished serial entrepreneur.
Mike Droesch (Bessemer Venture Partners). We spoke with Mike about B2B marketplaces and what he is currently seeing as an investor in the space. Mike is a vice president at Bessemer Venture Partners and he serves on the boards of Tackle and Cypress.
Conversations With Founders
Ryan Smith (LeafLink). Ryan has built one of the largest B2B Marketplaces in the cannabis space focused on connecting brands and retailers. He’s learned a ton in a really challenging operating space with a lot of state by state restrictions.
Randy Altschuler (Xometry). Randy has created a B2B Marketplace for on-demand custom manufacturing bringing better price discovery and improved sourcing to a previously opaque market. He offered us some great insights around how B2B Marketplaces can create value for all participants.
Drew McElroy (Transfix). Drew co-founded Transfix, a leading freight B2B Marketplace. He spoke with us about scaling, the role of domain expertise in building a marketplace, and the problems he focused on addressing when looking for initial market traction.
Dan Magnuszewski & Joe Neiman (ACV Auctions). Dan and Joe co-founded ACV Auctions, an innovative B2B marketplace for the wholesale automotive sector. They spoke with us about their journey scaling ACV and offered up some insights on the value of domain expertise in launching a vertical marketplace.
Victor Hunt & Aaron Resnick (Astorian). Victor and Aaron are the co-founders of Astorian, a B2B marketplace matching property managers with contractors. They joined us to discuss how Astorian designed its marketplace to fit the unique needs of supply and demand in the contracting space.