Raw material procurement and business financing platform, OfBusiness, has raised $325 million in its fourth major equity fundraise this year, a top company executive 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, taking the overall valuation of the company to about $5 billion. The total fundraise includes a secondary sale worth $140 million, which saw participation from early investors and employee stock holders.
The company raised $160 million in July led by Softbank Vision Fund 2, marking its entry into the growing list of Indian unicorn club at a valuation of $1.5 billion. The industrial goods seller quickly doubled its valuation to $3 billion in September, after it raised $207 million, led by Tiger Global.
According to company's co-founder Nitin Jain, the company is expected to use the funds to -- diversify the business and grow foothold in the export markets; boost its financial services and credit business, as well as to enter into the manufacturing segment.
The company is also eyeing an initial public offering (IPO) by 2022 and looking to list on the Indian exchanges, Jain added. He declined to share details on the listing.
With the fundraise, the company will look to invest in profitable small and medium enterprises (SMEs), which manufacture industrial goods, in a bid to optimise their asset usage as well as to fortify its own supply chain operations.
Jain also declined to comment on the total number of SMEs that OfBusiness will invest in.
Launched six years ago, OfBusiness is a technology-enabled platform that facilitates raw material procurement and credit 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 adhering to their timelines through online and offline support.
“We noticed that SMEs run only on 50% capacity and lack resources to scale their output. Hence through partnering and investing in them we realised that we can help them increase their profitability through a jump in utilisation, while ensuring they grow multifold. Through investments, we will look at a backward integration, help SMEs utilise their dead assets for goods that we also sell and distribute,” added Jain in an interview with Mint.
Currently, OfBusiness is clocking a monthly gross merchandise value (GMV) of $120 million, a 41% jump since August this year. The company plans to exit the current fiscal year with a monthly GMV run rate of $180 million - $200 million.
Newer categories including raw materials for agriculture, food processing and garment industries are already contributing roughly 25% of the firm’s overall monthly GMV. The company is looking to add newer products and stock units for chemical and steel industries, in the coming months. At present, OfBusiness has an active base of 2500 suppliers and has a geographic reach across 80 odd cities in India.
Over the past few months, the company has also forayed into foreign markets with expansion into the Gulf Cooperation Council (GCC) region, and Australia. It looks to launch its service across newer countries and enter Canada by the end of this year, providing for raw materials in the food processing and garments space.
Moving forward, the company will look to diversify itself from credit and offer newer financial products for its supplier base. Currently, the company provides unsecured and secured loans to its supplier base through its NBFC arm. OfBusiness will also look at add another 120 members to its 800 member- team in the next 4-5 months, Jain added.
The company reported an overall revenue of Rs 1748 crore and a profit of Rs 55.7 crore for the fiscal year ending March 2021.