OfBusiness, an Online business-to-business (B2B) marketplace has raised $11.1 million (approx Rs 75 crore) in Series B round of funding. The round was led by Zodius Capital along with existing investor Matrix Partners and Angel Investors. The company is planning to expand its footprint to cover over 30 clusters and introduce more product lines in consumables.
OfBusiness was launched in 2016 with the aim to solve the problems of price discovery, reliability and financial access in the areas of material supply, credit and logistics in the manufacturing and construction sector and claims to have opened the door of possibility for the SMBs, by ‘harnessing the power of technology’. The company claims that it has focused on clusters rather than taking a pan-India presence approach. Currently it operates 10 clusters in Odisha, Delhi NCR, Tamil Nadu, Andhra Pradesh and Maharashtra with plans to expand to five more post funding.
“OfBusiness is in the process of picking up a non-banking financial company licence along with tying up with other NBFCs,” said Asish Mohapatra, Co-Founder and CEO, OffBusiness.
“B2B businesses should not be built on deep discounting as SMEs value service. Important service metrics include price discovery , on-time delivery, access to financing options, which they would be willing to pay for as long as one is broadly competitive on pricing. We have enforced transaction level profitability and it has resulted in 3% plus odd net contribution margins consistently for us,” Mohapatra added.
According to a report in ET, the company also plans to set up a non-banking finance company (NBFC) subsidiary to help map customer data, specific products for SMEs and also lend to them. This move seems to have been triggered by the growing attractiveness of the B2B ecommerce space where companies like Alibaba and Amazon have invested this year.
In series A round, the one and a half year old startup states to have raised $5 million (Rs 34.2 crore) led by Matrix Partners which has taken the company’s latest capital to over $15 million (approx Rs 110 crore).