B2C Investment Skyrockets Outside the Developed World
March 10, 2014
VC firms looking for scalable opportunities in developing economies have more targets to work with than the usual software and healthcare spaces. In the United States, consumers have most of their consumption needs already taken care of. Small surprise that VC investors have minimized their exposure to the U.S. B2C industry, where significant scaling opportunities are harder to come by. According to PitchBook data, only 12% of all capital invested since 2005 has occurred in the B2C space. In the U.S. (and the developed world in general), IT and healthcare investments reign supreme.
The scene is reversed in the developing world. Investors, even U.S.-based firms trekking abroad, have found far more opportunities in B2C companies in the developing world, given the larger scaling opportunities for developing countries that are growing rapidly in population and Internet usage. B2C investment, in fact, accounts for more than half (53%) of all VC financings in Asia since 2005, when a number of U.S.-based firms began forming overseas offices. The percentages aren’t much different in other parts of the world—62% in Africa, 59% in South America, 78% in Central America and 78% in the Middle East (excluding Israel).
The disparity between the developed and developing worlds in Internet retail investment is even starker. For more details on that investment trend and "copycat" entrepreneurship, click here.