Distributor Tech Investments Boost in H2 📊
In-depth look at Distributor's tech spending in H2 2022
Hi ,
This week we round out our distributor investment analysis with a look at tech investments made by Distributors in the second half of 2022. If you missed last week's overall 2022 data and our spotlight on H1 investments, you can give it a read here.
Alex & the Applico Team
CVCs INCREASE VC Activity in 2022
The only investor class to increase their VC activity from 2021 to 2022 - was... guess who? Corporate venture capital!
As we've predicted for our New Year version of the newsletter, 2023 is the year of the strategic. Tech companies are on sale. B2B distribution badly needs these capabilities and has been standing on the sidelines for far too long.
CVC investor activity is the brown line - as compared to other types of non-traditional investors. CVCs accounted for more share of deal count and deal value from 2021 to 2022. Share of deal count increased from 25.6% to 26.2% and share of deal value increased from 49.2% to 49.5%. These increases are nominal - yes; however, when compared to the rest of the market declining by 20-50% ... these numbers are pretty incredible.
With these CVC data points in mind, B2B distribution's 37% decline in tech investment activity is not going in the right direction.
H2 2022 Distributor Tech Investments:
Comparing against H1, we saw a slight uptick of activity in the tech investment and M&A space within the B2B distribution industry. We logged two tech acquisitions and four investments by distributors during H2 2022.
American Tire Distributors, a leading B2B distributor of tires and automotive parts, announced an investment in OneRail's $33 mm Series B fundraise in November '22. OneRail offers logistics management tools to connect shippers to a wide range of couriers. This investment will allow American Tire Distributors to augment its last mile delivery capabilities with a tech-enabled provider like OneRail.The post-money valuation is a little over $100 mm in this Series B - up from about $60 mm for the company's Series A fundraise in August '21.