Matrix-backed OfBusiness raises $160M led by SoftBank Vision Fund 2

B2B commerce platform to pursue tuck-in acquisitions and joint ventures to increase its control over supply chain.

31st July, 2021. New Delhi: OfBusiness, a technology-enabled B2B platform, announced a $160M funding round led by SoftBank Vision Fund 2, with participation from existing investors Matrix Partners India & Falcon Edge Capital, at a valuation topping $1.5B.

OfBusiness operates across highly fragmented and deep B2B supply chains wherein its unique business model provides value addition to customers through a technology-led full-stack solution that spans raw material fulfilment, revenue growth opportunities and working capital financing.

Started five years ago, the company is a leader in each of the nine B2B raw material supply chains it operates in. Its leadership extends across infrastructure (roads, housing, irrigation, etc.) and other manufacturing supply chains like engineering, food processing, heavy machinery, and capital goods. OfBusiness is a prominent supplier to these industries across raw materials like metals, plastics, petrochemicals, industrial chemicals, food grains and building materials. OfBusiness aims to cross the $1.1B revenue run rate mark -- profitable and growing at 4x YoY -- in commerce, by September 2021.

While the fulfilment platform provides cost-effective procurement, the company's financing platform, Oxyzo, provides cash flow matched financing to aid commerce. Over the last year, the company has expanded its financing to also include other financial services. Oxyzo has a loan book of $220M (growing 80% YoY), with a pre-tax RoA of over 5% and NPAs of ~1%. The financial services company has ~45 lenders across leading banks and non-banking financial companies (NBFCs).

The company has also built a strong tech backbone with two SaaS products that drive scale - a new opportunities marketing platform (Bidassist) that touches over 2.4M unique, actively engaged users and a business operating system for SMEs (SME Assist). Bidassist has now moved international with the sourcing of global tenders for Indian companies. The SaaS products, growing 2x YoY and independently profitable, increase the reach and engagement of the company with its users.

The above three businesses of the company work in tandem and act as data engines and service providers to each other. Hence, the company provides a full-stack, digital offering to its B2B users, increasing its relevance across the life cycle.

As India expands rapidly in manufacturing and infrastructure, buoyed by both regional and global tailwinds, OfBusiness aspires to build and consolidate its market leadership position. It aims to tap into more raw materials, geographies, marketing channels and other services. It is also expanding its offerings into semi-finished goods, private labels, and contract manufacturing.

OfBusiness' performance and value to customers withstood the uncertainty of the Covid-19 crisis, with the company (and Oxyzo) gaining a double notch upgrade to CRISIL A rating during the past financial year. OfBusiness is also in the process of making several strategic investments (both greenfield and brownfield) in its own sectors with multiple tuck-in acquisitions and joint ventures that will increase its control over supply, while also being profitable to other members in the ecosystem.

Commenting on the development, Asish Mohapatra, CEO & Co-Founder, OfBusiness, said: "The time for disruption in B2B commerce in traditional sectors of the economy was long overdue and has arrived. To take on the challenges of scale and uniqueness of B2B, one must be armed with teams, knowledge, technology and an ability to solve for credit needs. OfBusiness has been striving to build all 4 across its three B2B businesses. We welcome SoftBank to the family, and we are sure we will gain significantly from their muscle across capital and international markets.'

Munish Varma, Managing Partner, SoftBank Investment Advisers, said: "SMEs are the backbone of the Indian economy and important in making India a global manufacturing hub. The OfBusiness technology and finance platform improves productivity and efficiency turning them globally competitive. OfBusiness has achieved strong product market fit which is reflected in the strong growth they have seen over the last 18 months with best-in-class scale, unit economics, and we are excited to be part of this journey.'

Sumer Juneja, Partner, SoftBank Investment Advisers, said: "The 60M+ SMEs in India are underserved by the existing offline supply and finance chain. OfBusiness has successfully built a full-stack solution enabling commerce and financing through a single marketplace which is digitizing the SMEs. We have been impressed by the team's market leadership, growth and focus on profitability and eager to be part of OfBusiness.'

Navroz Udwadia, Co-Founder and Partner at Falcon Edge Capital, added: "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.'

Commenting on the fundraise, Vikram Vaidyanathan, Managing Director, Matrix India said, "Being early partners with OfBusiness has given us a ringside seat to this spectacular growth journey from day zero. The company's operational excellence, management bench of outstanding leaders, and profitable business model has positioned them as leaders of the B2B space. We welcome SoftBank to the partnership and wish the founders Godspeed on the near-term journey of creating an IPO scale institution.'

About OfBusiness:
OFB Tech (OfBusiness) is a tech-enabled platform that facilitates raw material procurement and credit in the B2B markets with a focus on the manufacturing and infrastructure sectors. It integrates technology to enable B2B commerce - to make available better products, at better prices, in better timelines to customers with comprehensive online and offline support. Key raw materials include metals, chemicals, polymers, Agri commodities, petrochemicals and building materials. OfBusiness provides access to cash flow-based financing for buying raw materials through its NBFC Oxyzo Financial Services. The company also offers tech-led marketing services through its Bidaasist platform for new growth opportunities.

About Matrix Partners India:
Matrix Partners India is an investment firm with approximately $1 billion under management. Founded in 2006, the firm invests in companies targeting the Indian consumer and enterprise market at the seed, early, and early growth stages. Matrix India has invested in several market-leading companies such as Ola (mobility), Dailyhunt (mobile local language platform), Razorpay (payments), Five Star Business Finance (SME lending), OfBusiness (credit led B2B marketplace), Ola Electric (electric vehicles), Stanza Living (tech-enabled student housing platform), OneCard (mobile-first credit card), Country Delight (D2C dairy & fresh foods brand), DealShare (social commerce platform), Mswipe (mobile POS), Zupee (leading skill-based gaming app) and Bijnis (digital B2B marketplace) among others. Matrix India has advisory offices in Bangalore, Delhi, and Mumbai. Matrix Partners has a global network of funds investing in the US, China, and India, with approximately $5 billion under management. Further information is available at'¯www.matrixpartners.in. To know more about our investment philosophy & ideologies, check out the #MatrixMoments podcast series.