When Oxyzo Financial Services recently raised a series A round of $200 million, India’s largest ever, it had another distinction. The company, the lending arm of the $5 billion-worth business-to-business raw materials procurement platform OfBusiness (OfB), became only the fifth unit of an Indian unicorn to earn that tag for itself. Others in the clique include electric two-wheeler maker Ola Electric and lock-screen platform Glance.

Oxyzo and OfB are both backed by Alpha Wave Global and Tiger Global, while OfB also counts SoftBank as an investor.

OfB’s peers Moglix and Infra.Market Infra.Market The Ken Infra.Market’s billion-dollar building blocks Read more , which are both valued at ~$2.5 billion, have also managed to attract investors. Moglix offers as many as 700,000 stock-keeping units (SKUs) across categories such as office stationery, industrial tools, and medical equipment. Infra.Market, on the other hand, has diversified from being a mere supplier of construction goods to launching its own brands in concrete, tiles, and bath fittings.

But the fact that OfB was valued at 2X of Moglix and Infra.Market in December, combined with Oxyzo’s recent fundraise, points to one thing—the B2B space has increasingly become a financing-first play. Oxyzo, an NBFC that began operations in late 2017, accounted for over 70% of OfB’s consolidated profit of ~Rs 55 crore ($7.2 million) in the year ended March 2021.

“In 2019 and 2020, we focussed a lot on building the lending business,” Oxyzo chief executive (CEO) Ruchi Kalra tells The Ken over the phone on a Sunday afternoon. “We were lending, and commerce was an added service.” Kalra’s husband, Asish Mohapatra, is CEO of OfB, which they both founded with three others in 2015. OfB is planning planning Bloomberg OfBusiness Seeking $2 Billion in Mega Indian Tech IPO Read more to file for a $2 billion initial public offer (IPO) around October.

Oxyzo’s contribution to OfB’s consolidated bottomline declined to 50% in the year ended March 2022, adds Kalra. This was partly driven by OfB’s gross merchandise value (GMV) in March 2022 reaching Rs 1,800 crore ($235 million), up more than 4X from a year earlier. Oxyzo’s loan book currently stands at Rs 2,650 crore ($350 million), 2X what it was a year ago.

“For all these guys, financing is the only way to monetise a transaction in the longer term. It’s as simple as that,” says the founder of an enterprise lending platform. They requested anonymity as they didn’t want to be seen talking about a competitor.

While Moglix launched its own supply chain financing platform, Credlix, in February 2021, The Ken has learnt that B2B manufacturing services startup Zetwerk is considering setting up an NBFC of its own.

AUTHOR

Seetharaman G

Starting out as a business journalist in 2008, Seetharaman has written about energy, climate change, retail, banking, and technology. He has worked with Business Today, a fortnightly, and the Sunday edition of The Economic Times.

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