The start-up ecosystem in India has grown and flourished like never before even as rumors of a third wave of COVID-19 are afoot. That has certainly not stopped start-ups from raking in loads of capital and expand their businesses. Business-to-business e-commerce platform OfBusiness is the latest firm to profit from the ongoing golden age after it joined the envious “unicorn” family following the raising of fresh funding of $160 million led by Japan’s SoftBank Vision Fund II, taking the valuation of the company to $1.5 billion. The collective holdings of the co-founders were diluted from 28.58% to 25.68%.
OfBusiness was valued at around $800 million in April following the $110 million funding round. Post-transaction saw SoftBank acquire a stake of 9.62% in the company while Alpha Wave’s stake increased to 10.62%.
This second investment round by OfBusiness this year (it had gobbled up $110 million in April) marked the firm as the 18th Indian start-up to evolve into a unicorn this year – a record in itself – and the Gurugram-based start-up joins online marketplace Droom, online trucking firm BlackBuck, banking tech platform Zeta, industrial B2B commerce platform Moglix, and others in attaining a valuation of over $1 billion this year.
While SoftBank invested $150 million in OfBusiness, the balance was invested by Falcon Edge and Matrix Partners. SoftBank has made several investments in Indian start-ups this year – it helped social commerce start-up Meesho and Zeta to enter the unicorn family. It has also invested in Swiggy and Flipkart and is likely to invest in portfolio firms.
According to OfBusiness co-founder and CEO Asish Mahapatra, the proceeds from the funding round would be used to fuel acquisitions and make strategic investments in order to gain more control over the supply chain of its core segments like food grains, metals, plastics, petrochemicals, industrial chemicals, food grains, and building materials. According to him, the company has reached a scale where it needs meaningful control over the supply chain, and acquisitions will increase their profit margins into double digits. He added that they are looking at companies with revenue in the range of ₹20-200 crores.
The seven-year-old start-up is known for sourcing raw material and providing companies with a portal to bid for government tenders. Additionally, it provides collateral-free loans of up to ₹2 crores to merchants and is known for working with prominent names like Godrej, Zomato, and Reliance Industries to ease the process of the agri-product supply chain. The start-up counts over 5,000 clients and more than 2,000 suppliers on the platform. Its financial platform Pxyzo operates through its non-banking financial company (NBFC) license. Its SaaS vertical helps small and medium enterprises (SMEs) with getting tenders online in the infrastructure and manufacturing sectors.
Unlike many start-ups, it is profitable and has a revenue run rate of $1.1 billion. While 55% of its revenue comes from commerce, lending and SaaS make up 43% and 2% of the revenue respectively.
