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Amazon sets up USD 250 million fund to back Indian startups

Written by Moulishree Srivastava Published on     3 mins read

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The newly launched venture fund will back Indian startups and entrepreneurs focusing on digitizing SMBs.

American e-commerce giant Amazon has unveiled a USD 250 million venture fund to back Indian startups and entrepreneurs focusing on digitizing small and medium businesses (SMBs), improving farmers’ productivity, and enabling healthcare access using technology.

Amazon Smbhav Venture Fund was announced on Thursday during the Seattle-headquartered firm’s annual four-day virtual event.

Amazon will invest in technology startups that digitize SMBs to make their products more accessible, increase efficiency of their daily operations including supply chain, the company said in a blog.

“The venture fund will independently invest in startups, building solutions to empower SMBs to launch, manage, and grow their business online, automate and digitize their operations, and expand their business globally by exporting to customers worldwide,” it said.

Meanwhile, in the agritech sector, the venture fund aims to invest in Indian startups that are using technology to bring the best produce to consumers, make agri-inputs like seeds and fertilizers more accessible to farmers, provide tailored agronomy solutions to improve productivity, distribute credit and insurance to farmers, and reduce food waste by building efficient farm to fork supply chains, it said.

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Read this: Are users from lower tier cities ready to pay for content? | Tales from India’s Towns

In the healthcare sector, Amazon will back those startups that are using technology for offering assistance to doctors, telemedicine, e-diagnosis, AI-powered treatment recommendations, or digitizing operations of healthcare providers such as independent primary care clinics, diagnostic labs, pharmacy value chain, and specialty doctor clinics.

Additionally, Amazon India’s venture fund will look for investment opportunities in technology startups that are influencing the livelihoods of SMBs.

To that end, Amazon announced USD 10 million investment in Gurugram-based startup M1xchange, with participation from  BEENEXT and existing investor Mayfield. The three-year-old supply chain financing startup connects MSMEs (micro small and medium enterprises) with banks and financiers through its marketplace. It enables MSMEs to use their invoice dues (payments to be received from clients) to take loan against it from a bank or financier. It claims the platform provides better financing rates which helps MSMEs solve their payment challenges.

“Over the last decade, India has gone through a sea change in the enormous number of MSMEs now selling their wares online. Our unique approach to supply chain finance will also benefit the large ecosystem of vendors built by Amazon in India,” said  Sundeep Mohindru, CEO, M1xchange.

“With this new funding, we plan to further expand our reach beyond the 352 cities from where MSMEs currently enjoy the benefit of discounted invoices,” said the startup that currently works with 36 banks.

M1xchange isn’t the only startup that Amazon has bet on this year. Late last month, Amazon India acquired Perpule, a Bengaluru-based retail tech startup that offers point-of-sale (POS) devices to brick-and-mortar shops for USD 14.7 million.

The same month, Jeff Bezo’s founded company wrote a check for direct-to-consumer beauty brand MyGlamm’s INR 175 crore (USD 23 million) Series C round, along with Ascent Capital and Wipro Consumer, valuing the company at more than USD 100 million.

Three-year-old MyGlamm, founded by Darpan Sanghvi, offers more than 600 products across makeup, skincare, and personal care categories which it claims are made of vegan ingredients. It said the platform has a reach across 70 cities in India.

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Earlier in January, Amazon India had launched its early-stage accelerator program Amazon Global Selling Propel, to enable consumer brands to sell their products in international markets.

Over the last five years, Amazon has been investing in Indian companies to strengthen its operations in India. These include BankBazaar, HouseJoy, QwikCilver, Emvantage, Shoppers’ Stop, Westland, and Future Coupons, among others.

Parallelly, sharpening its focus on SMBs in India, Amazon said it would bring one million offline shops online by 2025. This was in line with Amazon founder and CEO Jeff Bezo’s last year pledge of digitizing 10 million SMBs, enable USD 10 billion in exports, and create one million jobs by 2025 in the country.

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