Gurugram-based fintech platform OfBusiness has raised its next round of growth capital from existing and new investors.
According to the Ministry of Corporate Affairs filings accessed by Inc42, the company in a resolution passed on September 17 floated an offer to raise INR 242.35 Cr ($34.2 Mn) in Series D funding. The company is offering 3,632 Series D CCPS of INR 100 per share with a premium of INR 6,48,902 per share and 105 equity shares of INR 10 per share with a premium of INR 6,48,992.
The company is offering Series D shares to Falcon Edge India, Matrix Partners and Norwest Venture Partners. This investment was first alerted by data intelligence platform, Paper.vc.
In separate filings over the next days, the company has raised funds from these investors:
- Falcon Edge India picked up 400 Series D CCPS worth INR 25.9 Cr
- Matrix Partners India Investment Holdings picked up 5 equity shares and 22 Series D CCPS worth INR 32.45 Lakh and INR 1.42 Cr, respectively
- Norwest Ventures Partners picked up 100 equity shares and 3,210 Series D CCPS worth INR 6.4 Cr and INR 208.32 Cr, respectively
The company filings further showed that in September, it has issued ESOPs to 13 employees under its ESOP Plan 2016. Prior to this round, the company has raised over $49 Mn from multiple investors such as Matrix, Zodius Capital, Patni Group’s Apoorva Patni, Ola cofounder Bhavish Aggarwal, Quikr cofounder Pranay Chulet and Limeroad cofounder and CTO Prashant Malik among others.
OfBusiness: Profitability And More
OfBusiness was founded in 2015 by Asish Mohapatra, former VC at Matrix Partners; Bhuvan Gupta, ex-vice president of engineering at Snapdeal; and Ruchi Kalra, former McKinsey partner. The company is a SME financing platform which creates additional value with its raw material fulfillment engine and new opportunities platform.
The company website shows that it has supported over 1000 Cr business, has over 1100 clients and more than 100 suppliers. During the last fundraise, the company had said that it has about 30% of the borrowing entities being in the infrastructure business with an annual turnover between $731K- $14.6 Mn (INR 5-100 Cr).
Ashish Mohapatra claimed to have disbursed about 60% of its loans without any collateral. For collaterals, the company relies on bank guarantees or letters of credit from lenders. “Our interest rates hover around 1.5% per month, and because of our value proposition to these enterprises, we have been able to restrict bad loans to around 0.5%,” he added.
The company filings show that on a consolidated level, the company reported a profit of INR 97.12 Lakh in FY18, as compared to INR 1425.6 Cr loss in FY17. This was the result of doubling its revenue as well as expenses between FY18 and FY17.
On a standalone basis, the company reported a revenue of INR 397.77 Cr, with expenses of INR 398.92 Cr, thus reporting a loss of INR 114.3 Lakh.
SME Lending In India
The opportunity in the Indian SME lending market is huge. According to a May 2019 IBEF report, the public deposits of NBFCs increased from $293.78 Mn in FY19 to $4.95 Bn (INR 319.05 Bn) in FY18, registering a compound annual growth rate (CAGR) of 36.86%.
As per a survey conducted by BCG and Google in 2018, 23% of consumers in India have availed of retail loans digitally. Another interesting fact presented in this report says SME loans and personal loans have the highest digital influence as well as purchase rate. These insights address an interesting trait of the consumer behaviour of the digital lending landscape in India i.e. the high readiness of people with a digital footprint towards the adoption of digital lending in the country.
DataLabs by Inc42 said that between 2015 and Q1 2019, the total investment in Indian fintech startups was $7.62 Bn with a total deal count of 478. Out of the total funding, 25.49% ($1.94 Bn) investment came in lending tech startups.
Some of the leading lending startups include Indifi, Kissht, StashFin, Ftcash etc.