Notes by Narsi
In the past one year, I have witnessed the emergence of a number of online market places for diverse domains within climate tech.
In a way, it is a surprise, because most online market places in the last decade were built for mostly the B2C facing industries. While B2B marketplaces made their entry in the early days of dot com, most of them folded up as the B2B market characteristics were not aligned to online market places.
And these marketplaces have come up not just for tech-savvy sectors such as electric mobility but also for sectors such as agriculture. And I'm not talking just agritech, which is a well known success story, it's more about online marketplaces specifically for climate tech within agritech.
An example of this is AgriVijay, which is putting together an online marketplace (supported by distributed physical presence through a franchisee model). Another prominent climate action sector for which online marketplaces have come up is Waste Management - a well known example here is Recykal. And also for Biofuels (Buyofuel) and solid biomass feedstock (BiofuelCircle)
So will B2B marketplaces for the climate tech sector succeed?
I think it depends on how well the online marketplaces are able to tackle critical inefficiencies. Many consumer facing e-commerce marketplaces (Flipkart, Spotify...) are successful because they help customers discover products much faster, and also get their hands on them far more easily (without having to travel to a store, for instance) than what they can do in the physical world. They bring efficiencies to critical pain points - product discovery & access.
Are climate tech market places removing inefficiencies for critical pain points?
In some cases, yes. Consider what BiofuelCircle is doing - biomass feedstock discovery for small and medium biomass requirements for the commercial and industrial sectors. Biomass supply chain for industrial and commercial use has posed challenges for long. While large industries have had the financial and systems support to identify and sew up fairly reliable supply chains, small end users have not had it easy, even when biomass was available in the vicinity. By focussing on this specific small-medium biomass use niche, this startup might indeed be solving n inefficiency worth solving.
I might not be able to say the same about an online marketplace for electric vehicles. For one, these are one time purchases and the end user might be more than happy to put in the time needed to visit multiple showrooms before selecting the right scooter. Even where an online discovery makes sense, I don't see why Flipkart cannot do as good a job as an electric scooter online market place (unless it is backed by a large custom showroom / distribution network, in which case it can hardly be called a marketplace).