2024 Distribution Tech Predictions in Review
A lot happened in 2024. Did we get last year's predictions right?
Hi everyone,
2024 was an exciting year for tech and B2B distribution. With advances happening at the frontier of AI, 2025 looks like it could be even more exciting.
We’ll get to our predictions for next year in next week’s newsletter. First, we want to look back at our predictions from a year ago for 2024. Did last year’s predictions come true or were they way off? Let’s take a look.
2024 Prediction:
One of our top 50 B2B Marketplaces will IPO this year
Result: True
It came down to the wire, but one of our top 50 B2B marketplaces in 2024 went public. ServiceTitan, which was a first-time addition to our rankings last year, IPO’d earlier this month on December 12 on the NASDAQ, under the ticker TTAN.
We did a full breakdown of ServiceTitan and its IPO here. So far, it’s been a good start for the company’s life in public markets. Its IPO went off at $71, and its shares opened at an even higher $101. As of close of markets on Friday, the price now stands at $108.39. That puts ServiceTitan’s market cap at $9.71bn, which surpasses even its peak-ZIRP-era fundraise valuation of $9.5bn, which was led by Thoma Bravo.
With ServiceTitan’s success, will the floodgates open for more B2B marketplaces to go public? You’ll have to wait and see who makes it into our forthcoming update on our annual top 50 marketplace rankings.
2024 Prediction:
AI will make a real difference in B2B Distributors’ P&L
Result: True-ish (with more to come)
AI went from buzz word in 2023 to more of a reality in 2024 for B2B distribution. We know a number of major distributors that have implemented AI solutions that saved them or made them in the millions of dollars. For low-margin businesses, that’s a meaningful impact. But it’s not quite the “real difference” we predicted going into 2024.
While we’ve seen a positive early impact, it’s still early days for AI in B2B distribution. Will 2025 be the year? More to come on that next week in our 2025 predictions.
We covered some of the areas we’re seeing real, tangible impact from AI in a post earlier this year:
2024 Prediction:
eProcurement 2.0 will continue to outperform
Result: True
Going into 2024, we predicted a big year for “eProcurement 2.0” in B2B distribution – and tech companies delivered.
As a refresher, eProcurement 2.0 means end-to-end transactions that are happening entirely inside of the software being used by a distributor’s customer. This is distinct from the prior generation of eProcurement tech, like punchouts and EDI, which was a much more fragmented user experience.
So what happened in 2024? For one, new public market darling ServiceTitan is an eProcurement story. Its evolution from SaaS into marketplace was a big part of its IPO story, which we covered in our ServiceTitan IPO breakdown. We also featured a number of leading tech companies enabling eProcurement at this year’s Innovators Summit. Day 1 of the Summit focused on technology being used by the customer of B2B distribution, and our cohort included several companies with meteoric growth in eProcurement volumes over the last year, including some well into the billions in GMV.
We also saw a number of SaaS companies bridge the gap to become marketplaces by enabling eProcurement, as represented by a number of new entrants into 2024’s B2B marketplace top 50, including the new #2 in our rankings: Acculynx. Expect even more SaaS to marketplace stories to show up in this year’s rankings.
2024 Prediction:
Smaller Distributors can level the tech playing field
Result: True-ish
As predicted, 2024 was a good year for SaaS tech companies that help SME B2B distributors digitize their operations. A number of tech companies focused specifically on small and midsize distributors saw increasing traction. Many of the technologies we mentioned in our prediction like customer portals, payments, and messaging are now table stakes throughout the industry. So, in the immediate term, SME distributors are increasingly able to deliver a differentiated experience by leveraging new technology solutions.
However, the problem for SME distributors is that we also saw a big shift from SaaS to AI automation gain steam throughout 2024. And, thus far this AI shift has been a bigger benefit to large distributors. Why? Well, we’re seeing economies of scale translate more directly than vertical specific SaaS. For example, data quality matters a lot for training the AI and big distributors have been able to invest a lot more in their data than small distributors.