Technology-enabled SME financing platform OfBusiness on Wednesday announced that it has raised Rs 200 crore in Series-C financing led by Creation Investments and Falcon Edge with existing investors Matrix Partners and Zodius Capital participating in the round.
With this new round of funding, the company has raised a total of Rs 500 crore of equity and debt funding till date. The company has also raised debt lines from Kotak, Tata Capital, RBL Bank and Northern Arc, amongst other lending partners. Avendus Capital was the advisor to the current transaction.
The latest infusion of growth capital will be used by OfBusiness for continued rapid growth and greater financial leverage.
Incorporated in August 2015, the company gives purchase finance, which is aligned to the cash flow cycles for traditional sectors as manufacturing and infrastructure, enabling access to institutional credit, an alternative to high-cost distributor financing.
OfBusiness also differentiates itself by adding value to an SME’s business beyond financing, through its raw material fulfillment and new opportunities platform Bidassist. Bidassist, started last September, provides cost-effective procurement of raw material to SMEs and ensures guaranteed end use of funds for OfBusiness. This integrated offering enables higher business yield, repetitive loan transactions and better asset quality.
According to the company’s website, the lending platform reached assets under management (AUM) of more than 100 crores in August last year. As of March 2018, the company stated that it had close to more than Rs 100 crore in AUM and sports disbursals of more than Rs 100 crore.
On the fundraise, Asish Mohapatra, Co-founder and CEO, OfBusiness said,
“We are great believers in the potential of SME lending in India towards the core sectors of the economy that have high dependence on traders and distributors for working capital. With financial services partners as Creation Investments and the right cost of capital through our debt lines, we will continue to bundle innovative lending and procurement solutions to address the growing needs of SMEs in India.”
While, Tyler Day, Director at Creation Investments added,
“OfBusiness has built an impressive suite of financing solutions tailormade for the needs of SMEs in the manufacturing and infrastructure sectors, segments largely underserved by banks and traditional NBFCs. The scale that OfBusiness has achieved in such a short time is both a testament to the company’s innovative products and the untapped potential of the SME sector in India. We are excited about the company’s future and the opportunity ahead.”
Commenting on the fundraise Vikram Vaidyanathan, Managing Director, Matrix India added,
“OfBusiness captures the SME’s need for repetitive purchase finance with a unique business model. Their proprietary data advantage is reflected in the increasing efficacy of underwriting and support from marquee banking partners. We’re privileged to partner at an early stage with Asish, Ruchi and Bhuvan to create an SME financial services platform and welcome the new investors to the partnership.”
Lately, the lending space has been attracting quite some attention from investors. In January this year, SME lending platform LendingKart had announced the closing of their $87 million Series-C round, one of the largest in the SME lending space, led by Singapore’s Fullerton Financial Holdings Pte Ltd., a subsidiary of Temasek Holdings.
Then there was digital lender Capital Float, which announced it had raised $22 million in equity funding from ecommerce behemoth Amazon Inc. The investment also marked the close of Capital Float's Series C round, taking the total fund-raise to $67 million.