OfBusiness, a raw material procurement and business financing platform, has raised $325 million at a valuation of $5 billion, a top company executive said on Monday.
The Series G round, OfBusiness’ fourth major equity fundraising this year, was led by Alpha Wave Ventures II, Tiger Global Management and SoftBank Vision Fund 2. The total funds raised include a secondary sale worth $140 million, which saw participation from early investors and employee stockholders.
The company raised $160 million in July, in a funding round led by SoftBank Vision Fund 2, at a valuation of $1.5 billion, marking its entry into the growing list of Indian unicorns. The industrial raw material goods seller quickly doubled its valuation to $3 billion in September, when it raised $207 million from investors led by Tiger Global.
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According to co-founder Nitin Jain, OfBusiness plans to use the funds to diversify its business, secure a foothold in the export markets, boost its financial services and credit businesses, and enter the manufacturing segment.
Jain added that the company is also eyeing an initial public offering by 2022 and looking to list on local stock exchanges. However, he declined to share further details.
With the latest fundraising, the company will also explore investing in profitable small and medium enterprises (SMEs) that manufacture industrial goods to optimize their asset usage and strengthen its supply-chain operations.
Jain declined to comment on how many SMEs the company plans to invest in.
Founded six years ago, OfBusiness is a technology-enabled platform that facilitates raw material procurement and credit in the business-to-business (B2B) markets, focusing 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 realized that we could help them increase their profitability through a jump in utilization while ensuring they grow multifold. Through investments, we will look at backward integration, help SMEs utilize their dead assets for goods that we also sell and distribute,” added Jain in an interview.
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 $180-200 million.
Newer categories, including raw materials for agriculture, food processing and garment industries, are contributing roughly 25% of the firm’s monthly GMV.
The company is looking to add newer products and stock units for the chemicals and steel industries in the coming months. It has an active base of 2,500 suppliers and reaches over 80 cities in India.
Over the past few months, OfBusiness has entered foreign markets, including the Gulf Cooperation Council (GCC) region and Australia. It aims to launch its service across more countries, including Canada, providing raw materials in the food processing and garments space.
The company will also 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 add 120 employees to its 800 member-team over the next 4-5 months, Jain added.
The company reported revenue of ₹1,748 crore and a profit of ₹55.7 crore for the year ended March.
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