Decoding Oxyzo’s unicorn round and captable

Oxyzo Financial Services, the lending arm of industrial goods and services procurement platform OfBusiness, entered the unicorn club with a $200 million Series A round led by Alpha Wave and co-led by Tiger Global, Norwest Venture Partners, Matrix Partners and Creation Investments in March this year.

While the company did not provide further details such as the breakup of the round and allotment of stakes in the company, Fintrackr has decoded it through Oxyzo’s regulatory filing filed with the Registrar of Companies (RoC).

Oxyzo has passed a special resolution to allot 1,43,82,868 Series A Compulsory Convertible Preference shares (CCPS) and 2,93,528 equity shares at an issue price of Rs 1,041.26 per share to raise Rs 1,528 crore or around $200 million.

Alpha Wave led the investment round with Rs 565 crore while Tiger Global and Norwest Capital participated with Rs 344 crore and Rs 290 crore respectively. Creation Investment and Matrix partners also joined one of the largest Series A rounds in the ecosystem with Rs 152 crore and Rs 145 crore respectively.

Following the fresh allotment of shares, OFB Group, including promoters, hold around 74% stake in the company whereas Alpha Wave, Tiger Global, Norwest Capital, Creations Investments and Matrix will hold 7.40%, 4.50%, 3.80%, 2% and 1.90% respectively.

As per Fintrackr’s estimates, Oxyzo has been valued at around $1 billion post allotment of Series A. The company’s entry into the unicorn club makes it one of those rare startups to reach unicorn status at Series A stage itself. Edtech company PhysicsWallah also raised its Series A round at a $1 billion valuation.

Also, Oxyzo is among a few startups which operate as a separate unit and turned into a unicorn. The list also includes Ola Electric, Paytm Mall, PhonePe, Glance and GlobalBees. Paytm Mall, however, lost its unicorn status in December last year.

OfBusiness entered the B2B procurement ecosystem in 2017 and launched Oxyzo which lends to SMEs for supply-chain finance. The platform has also started lending to new age businesses in sectors like logistics, warehousing and direct-to-consumer, besides financing suppliers of OfBusiness.

For the fiscal year ending on March 31, 2022, or FY22, Oxyzo’s operating revenue grew 58% to Rs 313 crore from Rs 198 crore in FY21. According to the company’s audited financials filed with SEBI, its profits also increased 73% to Rs 69.34 crore in FY22 from Rs 40 crore in the previous fiscal year.

In April, Oxyzo claims that it registered 2.8X growth in its loan value from Rs 900 crore in FY20 to Rs 2,600 crore in FY22. As of FY21, OfBusiness used to generate 12.5% of its revenue from financial services (Oxyzo). It would be interesting to see the share of Oxyzo in OfBusiness’ overall revenue in FY22. Oxyzo competes with the likes of FlexiLoans, Aye Finance, NeoGrowth Credit, and Vivriti.