Aditya Birla Group said on Tuesday, 19 July, that it would invest Rs 2000 crore in B2B commerce for the building segment over the next five years. Grasim approves the investment plan.
Tech unicorns like Infra Market and OfBusiness have become major players in the building material segment of business-to-business eCommerce over the last few years.
Infra Market was valued at $2.5 billion and raised over $400 million through 12 funding rounds to date. On the other hand, OfBusiness was last valued at $5 billion earlier this and raised around $900 million through 11 funding rounds.
According to the Aditya Birla Group, the overall building material procurement segment in India has grown at a CAGR of around 14% over the last 3 years. The building construction industry is estimated at $100 billion, with current digital penetration of just 2%.
Kumar Mangalam Birla, Chairman, Aditya Birla Group, said, “The foray into B2B e-commerce is yet another strategic portfolio choice as it crystallises our intent to invest in the new-age, high-growth digital space. The building materials segment presents a huge scalable business opportunity with a proven path to profitability.”
Latest Read- Adani Bought Israel’s Haifa Port
“With this foray, Grasim would be able to leverage the large B2B ecosystem within the Aditya Birla Group. This move will also catalyse the growth of the MSME universe in India and provide an impetus to the Government’s vision of ‘Digital India’,” he further said.
According to the research, the building construction industry in India is expected to record a 15% CAGR to reach $120 billion by 2025. Experts also said that the building materials account for 50-75% of construction costs in India.