Editor’s note. The investment market for B2B marketplaces is hot and getting hotter. In the last 18 months, B2B marketplace companies and B2B marketplace technology providers such as Mirakl, Xometry, ACV Auctions, Material Bank and others have raised hundreds of millions of dollars from eager investors. Some B2B marketplaces such as ACV Auctions also are now valued at $1 billion to $3 billion and potentially headed higher.

To explain why this segment of the B2B ecommerce market is raising enormous sums of money and if these deals are a passing fad or a long-term trend, Digital Commerce 360 reached out to Michael Brown and Loren Straub of Bowery Capital, a well-known and highly respected digital commerce investment firm, for some answers.
Q: B2B marketplaces seem to be acquiring lots of capital—what trends are driving this?
Straub and Brown: At a macro level, COVID-19 helped catapult a lot of B2B marketplace adoption. A lot of offline industries traditionally powered by tradeshows and in-person auctions have all been forced to go online.

Another trend is as the older generations are retiring, the new decision-makers tend to be folks who have grown up with the internet and a smartphone in their pocket.

They are used to living their personal lives online, are comfortable and seeking a way to bring this into their work environments. More specifically, we are starting to see successful B2B marketplaces reach multibillion-dollar valuations.

ACV Auctions Inc. recently went public ($3 billion enterprise value), and Material Bank recently reportedly raised at a $1 billion valuation. While we historically questioned the merger and acquisition (M&A) or initial public offering (IPO) market for some of these names, we have been pleasantly surprised.

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