Tiger Global Invests in OfBusiness: $3 Billion Valuation

OfBusiness Achieves Doubled Valuation

OfBusiness, a commerce startup specializing in industrial goods and offering credit solutions to small businesses, has experienced a rapid increase in valuation. It has doubled to $3 billion in under two months, according to a statement given to TechCrunch by a leading executive.

Recent Funding Rounds

Tiger Global spearheaded the startup’s $207 million Series F funding round. SoftBank and Alpha Wave also participated in this investment, as confirmed by OfBusiness co-founder and CEO, Asish Mohapatra.

This new capital injection follows closely on the heels of a $160 million round led by SoftBank just two months prior, which valued OfBusiness at $1.5 billion.

Growth Trajectory

This marks the third financing round for OfBusiness within the current year. The company has demonstrated substantial growth, with its valuation reaching $800 million in April.

Business Model Overview

OfBusiness functions as both a raw material aggregator and a provider of procurement finance. The company collaborates with financial institutions to extend credit lines to small and medium-sized enterprises (SMEs) generating annual revenues exceeding $3 million.

The platform leverages data gathered from user activity to assess loan applications from businesses utilizing OfBusiness for raw material sourcing and tender participation. This data-driven approach is a key differentiator.

Underwriting and Monetization

As explained to Bernstein analysts last year, this system allows a shift “from collateral based loans to cash-flow/ transaction-based lending.”

SMEs incur interest charges on their working capital loans, which are provided as card limits, and a margin on the raw materials they procure. The Bid-Assist platform serves as a resource for SMEs to identify relevant business tenders.

Tender sourcing and raw material margins contribute to improved monetization and, crucially, provide valuable predictive data for loan underwriting.

Financial Performance

OfBusiness currently boasts a revenue run rate exceeding $1 billion and maintains profitability. By July of this year, the company’s loan portfolio had grown to $220 million.

The company offers credit lines similar to cash-credit or overdraft facilities. Borrowers are only charged interest on the amounts they draw and are required to source raw materials through the platform.

This arrangement provides insight into loan utilization and data for ongoing underwriting and monitoring. Leveraging inventory is considered a stronger indicator than using loans to settle existing debts.

Future Plans

The newly acquired funds will be used to broaden OfBusiness’s operational reach within India. The startup is also actively exploring potential merger and acquisition opportunities.

Tiger Global’s Investment Portfolio

OfBusiness represents the latest investment by Tiger Global in the Indian market. The New York-based firm has invested in approximately twenty startups in India this year, including Apna, BharatPe, Gupshup, DealShare, Classplus, Urban Company, CoinSwitch Kuber, and Groww.