[Funding alert] OfBusiness raises $110M led by Falcon Edge Capital
Tech-enabled B2B platform OfBusiness has raised $110 million in funding led by Falcon Edge Capital. The round also saw participation from existing investors Matrix Partners India, Creation Investments, and Norwest Venture Partners. It also saw 73 employees and 12 angel investors sell stock worth $13 million.
OfBusiness Co-founder and CEO Asish Mohapatra told YourStory: "These angels have been part of OfBusiness from 2016 and they have now seen 13-15X returns depending on their initial investment in the company. With this funding, we aim to increase from eight industrial supply chains now to 11 in the future. We are also looking to deepen our presence in existing geographies."
OfBusiness also plans to make a few strategic investments and tuck-in acquisitions to penetrate deeper into existing supply chains and consolidate its dominance across them. The platform will also invest heavily in expanding its tech offerings to the B2B ecosystem.
Navroz Udwadia, Partner at Falcon Edge Capital, said: “OfBusiness stands alone today in the B2B supply chain terrain in its provision of a value-added full-stack solution to small and medium enterprises. From procurement to quality assurance, logistics to working capital financing, OFB is increasingly seen as the partner of choice to SMEs across multiple massive, fragmented supply chains.
"Most crucially, the company has been superbly stewarded through COVID and today runs both a profitable supply chain commerce business and a highly synergistic and also profitable supply chain financing business. When we talk to OFB suppliers and customers, we are consistently impressed at the RoI (return on investment) the business drives for each group. This is a business that is truly solving pain points.”
Focused on the B2B supply chain segment, OfBusiness allows businesses to add value to its customers through a technology-led full-stack solution that spans raw material fulfilment, growth opportunities, and working capital financing.
"We are also looking to integrate forward in the supply chain with asset-light entities' acquisitions between June and September this year," said Asish. "The focus is on companies with minor tech play that can automate with our full platform. We provide these companies with an ability to build large platform play, 100 percent subsidiary NBFC (non-banking finance company) that finances some of its customers as they may not have the working capital, and market them with our presence."
The company said it has a gross merchandising volume run rate of $1.5 billion and profit before tax run rate of over $20 million. While the fulfilment platform provides cost-effective procurement of raw materials to businesses, its financing platform, Oxyzo, provides cash flow-matched financing to aid commerce with a book of $200 million at a pretax return on assets of 5 percent. The company has also built a strong tech backbone that drives scale and with its new opportunities marketing platform, BidAssist, now touches over 2.1 million unique users.
Tyler Day, Partner at Creation Investments, said: “We are delighted to continue supporting OfBusiness. The company’s exceptional growth and pristine portfolio quality during the past unprecedented year is a testament to both the value that OfBusiness provides its customers, as well as the quality of the OfBusiness team.”
Over the last year, the company raised $200 million in debt across its 40 lending partners, including IDFC First Bank, Kotak Mahindra Bank, State Bank of India, Bank of Baroda, Bank of India, Punjab National Bank, ICICI Bank, HDFC Bank, Bandhan Bank, AU Small Finance Bank, Axis Bank, ResponsAbility, Hinduja Leyland Finance, and Hero FinCorp.
Niren Shah, Managing Director and Head of Norwest Venture Partners India, said: "OfBusiness has demonstrated leadership across both the fintech and B2B commerce domains. The team has been able to significantly scale its assets and profitability across both businesses driven by a full-stack tech platform and a strong liabilities framework. They have been able to do this by investing in a top team and by ensuring robust credit quality and business processes. We are delighted to be reinvesting in the OfBusiness team once again and wish the team all the very best as they seek to transform the underserved B2B and fintech landscapes in India.”
The company said it has navigated COVID-19 by focusing on quality and a profitable financing book, while simultaneously expanding its commerce business into multiple raw material supply chains serving various manufacturing sub-sectors including heavy machinery, consumer goods, agri-processing, and nation-building projects including metro lines, highways, affordable housing, irrigation, and drinking water.
On the fundraise, Vikram Vaidyanathan, Managing Director of Matrix India, said: “We’re privileged to be early partners with the OfBusiness team. Their relentless execution towards building India’s largest B2B platform has positioned them as the leader in the B2B space. With their profitable growth record, they are well on the way towards creating an IPO-scale company and we wish them godspeed in the journey ahead.”