Investing in Anar

Building the go-to B2B networking platform for Indian SMBs to turbocharge their growth

15th September 2021

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3 mins

Porter Gale, author of Your Network Is Your Net Worth, says: “I believe that your social capital, or your ability to build a network of authentic personal and professional relationships, not your financial capital, is the most important asset in your portfolio”. The importance of networking has been discussed and debated for multiple years now—with naysayers equating it to hustling people, hard sales or downright slimy practices. At the same time, many professionals swear by the power of the network they’ve built. Businesses across the world have for decades traveled to multiple fairs, events, etc., to discover vendors from whom they can source and buyers to whom they can sell. At Elevation, we firmly believe in the power of creating meaningful connections, and the impact networking can have on fostering personal and professional growth.

Cut to India’s SMB base, where networking is virtually an absent concept and businesses run on the power of legacy relations, even when they’ve long exhausted their competitive advantage. Small business owners almost take pride in the fact that their business has been run the same way from their grandparents’ time - while this endurance is commendable, this stagnation is perhaps not. In this paradigm, we intuitively felt that networking can fundamentally unlock massive opportunities for small-and-medium businesses (SMBs) and give them deeper exposure to the world around them.

In sheer numbers, this represents a massive base as well—India has 65-70 Mn SMBs in a highly fragmented base. Approximately, 8-10 Mn of these are now estimated to be using different tools and softwares for enhanced productivity. These somewhat more digitally savvy businesses are largely composed of manufacturers, traders and retailers operating across categories. Discovery has always been a huge pain point for each business persona. Manufacturers are always on the look-out for distributors while retailers are on the look-out for suppliers. Wholesalers and distributors require both. Discovery is primarily offline through word-of-mouth or through their existing supplier/buyer networks, which are often geographically restricted. Each business within these segments has explored different tools such as Facebook Marketplace, WhatsApp groups, Indiamart, TradeIndia, etc., but have not been able to find the ideal solution which allows them to expand their networks over time.

This is the core of the target segment and the problem statement that Anar is gunning to solve for. Starting from categories such as Apparel, Footwear, Beauty, Textiles and Jewellery, Anar aims to be the go-to networking platform for SMBs across India. Just from a commerce opportunity lens, these categories account for more than $100 Bn in B2C spends, and therefore expected to be a multiple of this in terms of B2B transaction flows given multiple  steps across the value chain.

With Anar, Nishank and Sanjay are taking a unique discovery-first approach to B2B commerce. Through this platform, businesses across the value chain can interact with one another. The app aims to address the challenge of ‘trust’, which is the other fundamental issue that SMBs face when expanding their networks. The Anar business app allows its users to create a profile, upload their catalogue, create posts, form connections, post requirements and interact with one another. Through this approach, Anar has been able to flip the archaic search-led approach to a more discovery and trust-driven approach.

We first met Nishank and Sanjay almost 2 years ago when they were just starting to think about the problem statement and how they wished to tackle it. Nishank was acutely aware of the challenges faced by small businesses, having seen them in close quarters in his family business. Sanjay, on the other hand, was intrigued by the opportunity to create a category defining business and driving deep impact for millions of small businesses.

Creating a new social/ community layer is a non-trivial challenge and the cold-start is especially tricky and requires patience. Nishank and Sanjay have been enduring and building Anar steadily since 2019, something we really admired. They have always been resilient and capital efficient in their approach, and have reached significant scale without spending heavily on paid marketing - demonstrating a strong product pull. They have continued to add features and sections to the product, which have increased user stickiness and specific categories (e.g., Apparel) are starting to see high levels of liquidity.

Through our numerous customer calls (~50) we realised the depth of the pain point amongst the users, and that was a true eye opener. Users were not just chasing transactions and business partners, but deeply valued the network they were building. The product was breaking geographical barriers for them and they appreciated the ability to identify new designs and innovations, both within their category and across other categories as well. From a data lens, the customer love came through in their cohorts as well, where they witnessed very strong retention among their customers especially once they were activated on the platform.

With all the ingredients in place, we believe Anar is poised to be a powerful destination, which will enable Indian SMBs to grow their business. We are thrilled to partner with Nishank and Sanjay as they build a category defining company.