OfBusiness Doubles Valuation To $3 Bn With $200 Mn Fundraise

OfBusiness Doubles Its Valuation To $3 Bn With $200 Mn Funding

SUMMARY

OfBusiness had last raised $160 Mn from Masayoshi Son’s SoftBank, entering the unicorn club at $1.5 Bn valuation

The startup plans to deploy the fresh funds to expand its operations in the southern and central parts of the country, while also eyeing merger and acquisitions opportunities in manufacturing sectors of over 10-year-old profitable companies

The ecommerce unicorn facilitates raw material procurement and credit for SMEs in the manufacturing and infrastructure sectors

Delhi NCR-based B2B ecommerce marketplace OfBusiness which offers loans to infrastructure SMEs along with materials such as TMT bars, polymers, kraft paper, cement and building materials, on Thursday (September 30, 2021) has raised $200 Mn in Series F round led by Tiger Global at $150 Mn.

Existing investors SoftBank Vision Fund II and Falcon Edge Capital infused $25 Mn each, taking the valuation of the startup to $3 Bn, only two months after it entered the coveted unicorn club.

The funds raised will be used for geographical expansion to South and Central India as well as mergers and acquisitions of profitable companies within the manufacturing sector, cofounder Asish Mohapatra told Inc42.

“The average age of the companies that we are looking to acquire is 16 years, from Tier-II cities in India,” he added.

Currently, major OfBusiness consumers are from West (40%), North (35%) and South (20%) India, while Central and East India have a combined consumer base of 5% for the startup, Mohapatra informed.

Founded in 2016 by Bhuvan Gupta, Vasant Sridhar, Ruchi Kalra, Nitin Jain, and Asish Mohapatra, the marketplace facilitates raw material procurement and credit for SMEs in the manufacturing and infrastructure sectors.

The startup integrates technology to SMEs buying behaviour to make available better products, at better prices, in better timelines to customers with comprehensive online and offline support.

OfBusiness also enables SMEs access to cash flow-based financing for buying raw materials through its NBFC — Oxyzo Financial Services.

Of Business’ revenue for September was $100 Mn, EBITDA positivity at 2.5% for OfBusiness and 6% for Oxyzo Financial Services. Mohapatra claimed. “We are at an annual revenue run rate of $1.2 Bn and a loan book size of over $240 Mn. For Oxyzo, our crown jewel, our NPA stands at 1%, which was even lesser before the pandemic.”

Ofbusiness competes against B2B ecommerce unicorns Infra.Market, Moglix as well as Udaan besides other companies such as publicly-listed IndiaMART and Zetwerk.

The fresh infusion is the third round for the infrastructure ecommerce startup in 2021. It last raised $160 Mn from Masayoshi Son’s SoftBank in July 2021, at a $1.5 Bn valuation. Before that, it raised $110 Mn in April 2021, led by Falcon Edge at an $800 Mn valuation.

Overall, OfBusiness has raised close to $570 Mn to date.

While OfBusiness’ approach is more focused on procurement and loan services to the unorganised SMB infrastructure marketplaces, in India, several initiatives from companies such as Amazon, that runs programmes such as Karigar, Saheli and Launchpad programmes focused on various SMB sectors, also help the B2B sectors scale.

Under its Samarth Initiative, Flipkart works closely with NGOs and government bodies to promote and encourage rural entrepreneurs, with a special focus on women-led enterprises, artisans and weavers. Flipkart claims to have around 100K MSME sellers on its platform.

According to a report by RedSeer, India’s B2B ecommerce market is expected to reach $60 Bn by 2025, currently growing at an 80% compound annual rate (CAGR).

Update | 3rd October, 10:30 AM

The story has been updated to include details of the funding round and OfBusiness’ future plans.