As part of its Series D funding B2B lending platform OfBuisness has picked up Rs 250 crore and this round of investment in the startup has been led by Norwest Venture Partners. Existing investors Matrix Partners India and Falcon Edge, have also participated in this round of investment.
OfBusiness has a unique business model though its fundamental objective is to help SMEs get finance for their regular working capital requirements. The company goes a step further and assists with raw material procurement for companies in the manufacturing sector. It has created a dedicated platform known as Bidassist.
In the normal course, businesses would settle for higher prices for raw materials with a built-in interest component for deferred payments. This they resort to due to the absence of liquidity. OfBusiness steps in and makes the spot payment to the vendor of the raw material and converts the amount into a loan to the SME. The overall cost to the SME will thus come down making it a win-win proposition for all stakeholders. This model does the dual job of ensuring that the funds released by OfBusiness are used judiciously by the SME, while ensuring better profitability through reduced costs.
The startup has clocked excellent results in terms of growth and profitability over the first three years of its operations, something very few startups can boast about. It has an NPA figure of less than 1%, again should be the envy of any bank or NBFC.
As mentioned, OfBusiness has this unique model of business and it calls it Lending ++ (Lending coupled with procurement and marketing). The target customers are those SMEs which are otherwise profitable but are unable to access bank financing due to various reasons.
The promoters have built a scalable model of OfBusiness and hope to use the funds now generated to expand their presence in the country. With this Series D funding, the total amounts raised by the startup go up to Rs 1,500 crore of equity and debt funding. The company has, over the years raised debt from several top lenders across banks (Kotak, HDFC, ICICI, Axis, RBL, IDFC First, AU and Utkarsh, among others) and other financial institutions (HLF, Unifi, MAS, Vivriti and Northern Arc Investments, among others).
Oxyzo Financial Services is the name of the parent company that holds the licence to run the non-banking finance company operations of OfBusiness. Another venture OFB Tech Private Limited handles the other B2B services described above. The company has its headquarters in Gurugram.