Tech Deals by B2B Distributors - Q2 2023 📊
A look at how distributors and manufacturers are deploying capital into tech in 2023
This week we take a look back at Q2 and dig into the tech investments we saw from B2B distributors and manufacturers. As VC capital into B2B tech has dried up, the gap between B2B distributors and manufacturers and their respective willingness to invest in tech startups has, unfortunately for distribution, widened.
How Much Did Distributors Invest in Disruptive Tech in Q2 2023 💵
In Q1 2023, we reported that B2B distributors had made three tech investments, showcasing a modest but encouraging step in the right direction. However, Q2 2023 has gone in the opposite direction with distributors making only one notable tech investment during this period.
This discrepancy begs the question: Are B2B distributors struggling to keep pace with emerging tech and the large appetite of their manufacturing counterparts? We wouldn’t go that far just yet. Our take is that the slowdown in tech investments by B2B distributors in Q2 2023 may indicate a retrenchment strategy. Distributors could be taking a cautious approach, wanting to observe market trends and assess outcomes before deploying further capital into disruptive technologies. This approach could stem from the desire to mitigate risks and ensure that investments align with their long-term business goals.
While manufacturers continue to drive innovation through consistent tech investments, distributors are carefully navigating the rapidly evolving tech landscape to ensure optimal allocation of their (in most cases) less expansive resources.
While the overall disruptive tech investment landscape for B2B distributors may have cooled off in Q2, there is still one notable investment that deserves recognition. Below we have detailed the one investment from a B2B distributor as well as some of the standout investments made by manufacturers during the first half of 2023 that we think should be on your radar.
Total Raised: $20.5mm
Post Valuation: $52.5mm
RxLightning, a single destination for specialty prescription management, raised $17.5mm in Series A funding with participation from McKesson Ventures on June 6, 2023. The company aims to digitize and automate the historically complex manual enrollment process for patients starting specialty medications. RxLightning works in various therapeutic areas, including addiction medicine, cardiology, endocrinology, and dermatology. By reducing paperwork and improving communication, the platform accelerates the speed at which patients receive necessary therapies.
The Big 3 drug wholesalers in the U.S., AmerisourceBergen, McKesson, and Cardinal Health, are some of the most active distribution companies investing in tech. Readers of our Q1 2023 distributor investment rundown will recall McKesson’s February 2023 $3mm acqui-hire deal for Glide Health, a health tech company that offers a cross-functional revenue intelligence software for healthcare providers.
2023 Manufacturer Tech Investments To Watch 👀
Total Raised: $43mm
Post Valuation: $116mm
Arkestro, an automated negotiation software company, has secured $40 million in a Series A venture funding round. The company utilizes artificial intelligence to optimize procurement savings, driving significant improvements in the procurement process and fostering increased vendor participation.
Arkestro's software empowers organizations to achieve substantial savings on managed services and raw materials solicitations. The February, 2023 funding, which includes participation from Koch Disruptive Technologies, will fuel the company's growth and enable expansion of the impact of procurement across enterprises.
Total Raised: $111mm
Post Valuation: $300mm
BuildOps, the developer of all-in-one commercial contractor operations software, has secured $93 million in a Series A venture funding round led by