[Funding alert] SME lending platform OfBusiness raises Rs 250 Cr led by Norwest Venture Partners
Gurugram-based Ofbusiness has raised Rs 250 crore led by Norwest Venture Partners along with participation from existing investors Falcon Edge and Matrix Partners.
The startup focuses on lending to small and medium businesses, and provides unsecured credit of up to Rs 2 crore to SMEs through NBFC Oxyzo Financial Services. It has also partnered with Tata Capital and AU Small Finance Bank.
According to a study by Omidyar Network and Boston Consulting Group (BCG), digital lending to micro, small, and medium enterprises (MSME) in India can grow up to Rs 7 lakh crore by 2023, and this will be a 15x increase in annual disbursements.
According to the report, digital lending has the potential to propel the productivity of India’s MSMEs, disrupt the status quo in financial services, and offer a meaningful market opportunity for both innovative startups as well as traditional lenders.
OfBusiness was founded in 2015 by Asish Mohapatra, former VC at Matrix Partners; Bhuvan Gupta, ex-vice president of engineering at Snapdeal; and former McKinsey partner Ruchi Kalra. Asish said,
“We strongly believe that lending is a commodity or will get commoditised in the future. The only way to monetise, engage, and create network effects in lending is by adding services that are inherently valuable to the customer while being profitable on a stand-alone basis for the financier.”
The year 2018 was a big one for the Indian financial technology and financial services ecosystem. According to YourStory, nearly $2.34 billion was raised across 145 deals, and fintech also finally unseated ecommerce after its years of dominance.
Niren Shah, MD and India Head, Norwest Venture Partners, said,
“We are delighted to partner with the OfBusiness team, which we believe has built an exceptional track record in tech-based SME lending to the manufacturing and core sector."
Vikram Vaidyanathan, MD, Matrix Partners India, said, “OfBusiness team has succeeded in creating a unique model combining conservative underwriting and collections practices with the rapid scalability of its tech platform.”
The company reported a revenue of Rs 401 crore in FY 2018, and is yet to make profits.
(Edited by Megha Reddy)