A little over a decade ago, a confluence of innovation in the technology industry birthed a category of companies now valued at over $500 billion – the SMBTech industry. SMB stands for “Small and Midsized Business,” and prior to the iPhone’s launch in 2008, there was really only one major tech company focused on small business: Intuit, the “OG” of SMBTech (for more on why the iPhone launch was so pivotal, see our 2018 post on SMBTech
). Today another 21 public companies join Intuit in focusing on small business and make up our GGV Capital SMBTech Index.
In addition to Intuit, the Index is led by companies like Shopify, Square and RingCentral and represent a category that has grown from roughly $15 billion in public market value in 2010 to $200 billion in 2018 and $566 billion today. And while the American economy has had its ups and downs in 2020, the 22 companies on our SMBTech Index are up an average of 81% on the year (vs 29% for the NASDAQ overall). An incredible year for a category of companies that are critical to the country’s recovery in 2021, a fact not lost on public market investors.
The SMB economy is critical to America’s success: more than 60% of our country’s citizens work for a small business, and small businesses make up 40% of US GDP. The importance of the survival of these companies as we head into 2021 cannot be understated. And increasingly, their future rests on the innovation of the 22 companies in our SMBTech index. Corner shops can’t compete with the big retailers without Square. Online sellers can’t compete with Amazon and Walmart without Shopify, Wix and BigCommerce. And real estate brokers and insurance agencies can’t run their business without RingCentral, 8x8 and Intuit.
The small business economy in America literally runs on technology, and these 22 public companies are leading the charge. Additionally, there are thousands of great private companies in the SMBTech space, many will go public in coming years – we look forward to adding them to the GGV Capital SMBTech Index.