Bengaluru: Commodity sourcing and corporate finance platform OfBusiness raised $ 325 million in its fourth major fundraising this year, a top executive at the company told Mint on Monday.
The Series G round was led by Alpha Wave Ventures II (formerly known as Falcon Edge Capital), Tiger Global Management, and Softbank Vision Fund 2, bringing the company’s total valuation to approximately $ 5 billion. The entire fundraising process includes a $ 140 million second sale involving early investors and employee shareholders.
The company raised $ 160 million in July, led by Softbank Vision Fund 2, marking its entry into the growing list of Indian unicorn clubs with a valuation of $ 1.5 billion. The industrial goods seller quickly doubled its valuation to $ 3 billion in September after raising $ 207 million under the leadership of Tiger Global.
According to Nitin Jain, co-founder of the company, the funds are expected to be used to: – diversify the business and gain a foothold in export markets; to strengthen the financial services and lending business and to enter the manufacturing segment.
The company is also targeting an initial public offering (IPO) by 2022 and is aiming for a listing on the Indian stock exchanges, Jain added. He declined to provide details on the listing.
With the fundraising, the company intends to invest in profitable small and medium-sized enterprises (SMEs) that manufacture industrial goods in order to optimize their asset utilization and strengthen their own supply chain operations.
Jain also declined to comment on the total number of SMEs OfBusiness will invest in.
OfBusiness was launched six years ago and is a technology-enabled platform that facilitates the procurement of raw materials and loans in the B2B markets with a focus on the manufacturing and infrastructure sectors. It enables B2B commerce on its platform to help customers get better products at competitive prices while meeting their schedules through online and offline support.
“We found that SMBs only work at 50% capacity and have no resources to scale their production. Therefore, through partnerships and investments in them, we have realized that we can help them increase their profitability by taking a leap in usage while ensuring that they grow many times over. By investing, we will consider backward integration and help SMEs use their dead assets on goods that we also sell and distribute, « added Jain in an interview with Mint.
Currently OfBusiness has a monthly gross product value (GMV) of $ 120 million, up 41% since August this year. The company plans to end the current fiscal year with a monthly GMV run rate of $ 180 million to $ 200 million.
Newer categories, including raw materials for agriculture, food processing and the clothing industry, already contribute around 25% to the company’s total monthly sales. The company plans to add newer products and storage units for the chemical and steel industries in the coming months. OfBusiness currently has an active base of 2500 suppliers and has geographic reach in 80 odd cities in India.
In recent months, the company has also entered foreign markets by expanding into the Gulf Cooperation Council (GCC) region and Australia. It intends to launch its service in newer countries and move into Canada by the end of this year to provide raw materials in food processing and apparel.
In the future, the company will seek to diversify from credit and offer newer financial products for its supplier base. The company currently provides unsecured and secured credit to its supplier base through its NBFC arm. OfBusiness will also consider adding an additional 120 members to its 800-strong team over the next 4-5 months, Jain added.
The company reported total sales of 1748 billion yen and earnings of 55.7 billion yen for the fiscal year ended March 2021.
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