Exclusive: Tiger Global leads $200 Mn round in OfBusiness at $3 Bn valuation

Business to business e-commerce platform OfBusiness has raised $200 million in its Series F round led by Tiger Global, according to two sources aware of the details of the transaction. Existing investors SoftBank Vision Fund II and Falcon Edge Capital also participated in the round. 

According to sources, the company has raised the fresh round at a $3 billion valuation (post-money). This is an exponential surge in the company’s valuation which was valued at $800 million in April and $1.5 billion in July when it raised $160 million led by SoftBank Vision Fund II.

Asish Mohapatra, co-founder and chief executive of OfBusiness confirmed the amount of funding and the company’s latest valuation. “OfBusiness will use the funds to strengthen its leadership position in the raw material supply chain [commerce] and financing business,” Mohapatra said in an exclusive interaction with Entrackr.

“Tiger has led the round with over $150 million and picked up close to a 5% stake in OfBusiness whereas SoftBank and Alpha Wave together infused $43 million,” said one of the sources requesting anonymity. “The round is open to bring any new investor for $15 million,” the person added. 

Mohapatra declined to comment on this and did not share any further details about the fundraise. It’s worth mentioning that Kalra is the only woman co-founder among 28 startups that turned unicorn this year.

Last month, Moneycontrol had reported about the potential deal. 

The company has also joined the likes of professional networking platform Apna and used car retailer Spinny — all of which have had three funding rounds in this calendar year. While Apna raised around $182 million in three rounds, Spinny scooped up $173 Mn across two rounds and is all set to raise $200-300 million in new financing.

Business model, scale, ESOPs and competition

Founded by Mohapatra, Ruchi Kalra, Bhuvan Gupta, Vasant Sridhar and Nitin Jain, the six-year-old company helps source raw material and provides companies with a portal to bid for government tenders. It also provides access to cash flow-based financing for buying raw materials through its NBFC Oxyzo Financial Services. 

According to the company, Oxyzo has a loan book of $240 million (growing 80% YoY), with a pre-tax RoA of over 6% and NPAs of 1.2%. It has 5,000 borrowers on its Oxyzo platform while it works with many corporates to solve their supply chain issues with SMEs in the agri business.

With the growing scale and valuation, OfBusiness also expanded its employee stock ownership plan or ESOP to take the total ESOP pool size to Rs 282 crore or $38.5 million. Entrackr had exclusively reported the expansion in June.

The company claims that it is growing at 4X year-on-year (YoY) and crossed the $1.2 billion (Rs 8,700 crore) revenue run rate mark in commerce as of September 2021. OfBusiness has recorded Rs 84 crore profit and FY21 and is expecting to post a profit of Rs 350 crore in the ongoing financial year or FY22.

Oxyzo has contributed close to 60% of its total profit in FY21. However, the company claims that the commerce business has been seeing tremendous growth and its share will be larger than the lending business by the end of the ongoing fiscal (FY22).

For the fiscal year 2020, the company saw its revenue from operations grow by nearly 34% to Rs 850 crore. It also saw an improvement in profitability as its annual profits nearly doubled to Rs 32.3 crore in FY20 as compared to Rs 17 crore in FY19, as per Fintrackr data.

OfBusiness commerce business competes with Moglix, Infra.Market, Zetwerk and a few others while its lending business attracts competition from banks and NBFCs. Notably, all these B2B e-commerce companies in the raw materials procurement space have achieved unicorn status in 2021.