Q2 B2B Distributor Tech Investments
Setting records and bouncing back from Q1
Hi everyone,
Is the VC winter thawing? We’ll have our Q2 Distributor Tech Report in next week’s newsletter. This week, we’re highlighting tech investments made by B2B distributors this past quarter. And, the good news is that we’re trending up and to the right!
Most Tech Investments in Past 8 Quarters
Distributors are savvy … and with that savviness comes an element of frugality. Paying the multiples in peak ZIRP sent B2B Distributor strategics running for the hills. The normalization of valuations in the past few quarters has seemingly eased some of those concerns, as evidenced by an all-time high of 7 tech investments in Q2 2024.
We saw tech investments made by the following strategics:
McKesson
Cencora
LKQ
BuildersFirst Source
Holcim
Wesco
and… Applico Capital!
Three of the seven minority investments were made out of a distributor’s CVC (corporate venture capital) arm.
Not included in our list of 7 tech investments, there were three more transactions in hardtech! We aren’t including these three deals in our charts and official tracking since they aren’t software companies – these are technology companies, but not a classical software business. For example, Holcim invested in Neustark, which is developing CO2 capture technology. Find the full list of all 10 tech investments below.
Distributor Tech Acquisitions Back in Vogue
After a dearth of tech M&A by B2B distributors, we’ve seen two consecutive quarters of tech acquisitions. This past quarter, Wesco acquired entroCIM, a building management software company.
Looking beyond deals by distributors, the broader B2B distribution tech M&A landscape is also seeing more activity. These charts don’t include the Epicor <> Kyklo acquisition from last quarter, nor Grubmarket’s acquisition of Butter.
Tech Startup Investment Profiles
Here’s the list of the 10 tech transactions from Q2 with a profile of each company and capital raised, including the three hardtech companies.