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 $207 Mn in Series F round led by Tiger Global.
Existing investors SoftBank Vision Fund II and Falcon Edge Capital also participated in the round, taking the valuation of the startup to $3 Bn, only two months after it entered the coveted unicorn club.
According to a Tech Crunch report, OfBusiness plans to deploy the fresh funds to expand its operations in the country and is also eyeing merger and acquisitions opportunities. Entrackr first reported the development.
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. Oxyzo has a loan book of $220 Mn that is growing at 80% year-on-year. The startup’s financial service has around 45 lenders across leading banks and NBFCs.
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 $560 Mn to date.
In July 2021, shortly after it turned unicorn, the startup also claimed that it was EBITDA positive. Currently, it has a revenue run rate of over $1 Bn and a loan book size of over $220 Mn.
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).
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