Business to business (B2B) e-commerce firm OfBusiness has become the latest entrant to India's ever-growing unicorn club. OfBusiness raised $160 million in its series E funding round, led by SoftBank Vision Fund II.
Existing investor Falcon Edge Capital also participated in the round. The company's valuation now stands at $1.5 billion, making it the 18th unicorn to emerge this year in India.
SoftBank led the round with an investment of $151 million, while Falcon Edge and Matrix Partners invested the remaining amount.
"The 60 million SMEs in India are underserved by the existing offline supply and finance chain. OfBusiness has successfully built a full-stack solution enabling commerce and financing through a single marketplace which is digitising the SMEs. We have been impressed by the team's market leadership, growth and focus on profitability and eager to be part of OfBusiness," said Sumer Juneja, partner, SoftBank Investment Advisers.
This was the second investment round for Ofbusiness this year. Earlier in April, the firm, which was valued at $800 million then, had collected $110 million in a round that was led by Alpha wave. Ofbusiness's valuation has jumped two-fold in the past four months.
The company will use the new capital for acquisitions and strategic investments in order to garner greater control over the supply chain of its core segments, co-founder and chief executive Asish Mohapatra told The Economic Times. The core segments of OfBusiness include -- metals, plastics, petrochemicals, industrial chemicals, food grains and building materials.
"We have been profitable but (acquisitions) will increase our profit margins into double digits. We have reached a scale where we need meaningful control (over the supply chain)," he said.
OfBusiness currently has a revenue run-rate of $1.1 billion, according to its July revenue. The firm normally earns margins of 15-10%, but acquisitions could help push this further to 20% in the future. "We are looking at companies that have revenue in the range of Rs 20-200 crore," said CEO Mohapatra.
The core business of OfBusiness is facilitating commerce. It also has a lending arm - Oxyzo - that provides loans of up to Rs 2 crore to merchants. The firm also has the SaaS vertical which helps small and medium enterprises with online procurement of various government tenders.
The commerce business contributes to 55% of OfBusiness' net revenue. Oxyzo and Saas contribute 43% and 2%, respectively, to revenue.
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