Industrial goods and services procurement platform OfBusiness has become the youngest unicorn to cross the Rs 7,000 core revenue threshold with a hefty profit. The seven-year-old company turned unicorn in July last year and leapfrogged its way into the pentacorn ($5 billion valuation) league in December.
OfBusiness’ total revenue soared over 4X to Rs 7,269 crore in FY22 from Rs 1,757 crore in the previous fiscal year (FY21), according to the company’s internal document seen by Entrackr. The sale of industrial goods (raw materials) and revenue from financial services offered to the buyers on their platforms were the primary sources of operating revenue for OfBusiness.
On the expenses front, the purchase of industrial goods and raw materials including construction materials, chemicals, and agro produce emerged as the largest cost centers, forming 94.5% of OfBusiness’ total expenses during FY22.
This head grew 4.4X to Rs 6,611 crore in FY22 from Rs 1,491 crore in FY21.
As the company’s lending arm offers credit facilities to its buyers, finance cost turned out to be the second largest cost center which surged 57% to Rs 157 crore in FY22.
As per the documents, employee benefit expenses for OfBusiness shot up 2.2X to Rs 122 crore in FY22. For context, if we compare the company’s expense on employees with other unicorns of its age, it is probably one of the highest in the ecosystem in terms of average revenue per employee (ARPE).
The Gurugram-based company also booked Rs 103 crore as other expenses which include transportation, advertising et al.
With a 4X jump in revenue, OfBusiness’ profit surged 3.6X to Rs 201 crore in FY22 from Rs 56 crore in the previous fiscal year (FY21).
The exceptional scale of the company led to a 4X growth in its cash flow from operations which reached Rs 2,016 crore in FY22. The ROCE is depressed for year closing as OfBusiness raised significant capital as was carrying approx Rs 4,000 crore of cash and cash equivalents as on March 2022 end. On a unit economics level, OfBusiness spent 0.98 to earn a single unit of operating revenue.
OfBusiness competes with Zetwerk which reportedly booked Rs 4,961 crore in revenue and Rs 42 crore loss in FY22. Infra.Market and Moglix are its other competitors which are yet to file FY22 numbers. During FY21, Infra.Market was profitable and posted a collection of Rs 1,243 whereas. Moglix’s revenue stood at Rs 777 crore during the same fiscal with a net loss of Rs 81 crore.
The success of the infra support and financing cohort of startups, for want of a better name, was always likely, thanks to the sizable financing opportunity in the category. Where Ofbusiness has made additional gains is in transitioning from just a trading platform to becoming suppliers themselves, besides their USP of financing of course.
Even at this scale, the opportunity remains immense in a market that is in the trillions of dollars in size and potential going ahead. With the firm continuing to make acquisitions at relatively attractive valuations, even as its scale expands rapidly, Ofbusiness has emerged to be one of the few startups that has repaid the faith in terms of actual market performance.