India's Ofbusiness secures $200m round for lending unit
OfBusiness, an India-based B2B platform focused on industrial supply chain and procurement services, has raised USD 200m in Series A funding for its lending unit.
Oxyzo Financial Services – a non-banking financial company (NBFC) that issues credit lines to small and medium-sized enterprises (SMEs) sourcing materials through the OfBusiness platform – is now valued at USD 1bn. The round was led by Alpha Wave Global. Tiger Global Management, Norwest Venture Partners, Matrix Partners, and Creation Investments were identified as co-lead investors.
OfBusiness achieved unicorn status in August 2021 and went on to raise USD 325m in Series G funding at a valuation of USD 5bn four months later. Alpha Wave led that round. Tiger Global, Norwest, Matrix, and Creation are also investors in the company.
OfBusiness was established in 2015 by founders who came from manufacturing backgrounds. They recognised the potential for B2B disruption of SME procurement processes and focused on industrial supply chains, bringing price transparency and opportunities for cost savings through bulk buying.
The starting point was Bid Asset, a searchable information source on government tenders in India and overseas. SMEs that came to the platform were pitched value-added services, such as raw materials procurement. Financing was added to the mix in 2016.
Oxyzo Financial Services receives inbound inquiries come from manufacturers that want to sell materials to SMEs but cannot provide credit, as well as from SMEs. Initially, it did not lend to companies directly, preferring to sanction credit lines and supply materials against these lines.
Over time, the NBFC expanded into segments beyond the OfBusiness sphere of coverage, lending directly to SMEs, mid-size corporates, and new economy companies, according to a statement. Assets under management now stand at USD 350m, having grown 100% year-on-year in 2021. Only 1.2% of the loan book is classified as non-performing. Oxyzo has been profitable since its inception.
In the past six months, the NBFC has launched a fixed income and securities business line, achieving a cumulative market volume of USD 1.6bn. The new funding will go towards expanding its digital financial services, notably in fee-generating segments.
"We're excited to support Oxyzo as it steps out of the group's shadows to disrupt the digital financial services space. As the B2B landscape in India evolves, OfBusiness and Oxyzo will be twin pillars to open up opportunities and lower costs for millions of SMEs across India,” said Griffin Schroeder, a partner at Tiger Global.
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