OfBusiness lending arm, Oxyzo a Fintech startup has raised its first external funding of $200 million from Alpha Wave Global and Tiger Global with participation from Norwest Venture Partners, Matrix Partners, and Creation Investments.
Following this funding, Oxyzo is the latest addition to the company’s growing list of India’s unicorns with a $1 billion valuation.
Gurgaon-based company OfBusiness was valued at around $5 billion in December last year after funding of $325 million. Oxyzo has been pulled out of the group and has raised external capital. New investors in Oxyzo are common to OfBusiness as well, with the exception of SoftBank, which has not yet invested in Oxyzo.
Gurgaon-based fintech company OfBusiness was founded in 2015 by Asish Mohapatra, Bhuvan Gupta, Nitin Jain, Ruchi Kalra, Srinath Ramakkrushnan, Vasant Sridhar.
Ruchi Kalra and Vasant Sridhar co-founder of OfBusiness will spend all their time on this business.
“We have operated Oxyzo as a separate unit as part of the OfBusiness group with its own team and now the business has reached a point where it could raise capital on its own. For example, 70% of lending from Oxyzo is outside the OfBusiness suppliers,” Kalra said.
Kalra said that it has a team of around 600 people and OfBusiness will still have around 70-80% stake in the company.
Oxyzo offers credit solutions that are customized to help SMEs expand their operations, revenues, and consequently their profit margins.
Kalra also said that currently has $350 million in assets under management that have more than doubled in one year, with gross non-performing assets of 1.2%.
“Oxyzo has been profitable since its inception and is currently at around 5.5% pre-tax return on assets, or RoA,” and new funds would also be used to maintain the capital adequacy ratio as per regulations, as the business would further be scale”, she added.
“We will also use the funding for inorganic expansion through acquisitions. We will scale the supply chain marketplace, launch innovative fixed-income products for the SME space, and scale other fee incomes business lines including debt capital markets and securities,” the CEO said.
Kalra said that OfBusiness and Oxyzo both have a strong credit profile with over 50 financial institutions and Oxyzo also plans to open their supply-chain markets to other lenders who can lend to suppliers and businesses on the platform.
“We’ve been fortunate to be their partners for a while and have seen an impressive scale-up with best-in-class risk management despite strong headwinds from Covid-19. We look forward to helping build a high-single-digit RoA business that compounds over a long runway,” said Navroz D Udwadia, cofounder and partner at Alpha Wave Global.
“As the B2B landscape in India evolves, OfBusiness and Oxyzo will be twin pillars to open up opportunities and lower costs for millions of SMEs across India,” said, Griffin Schroeder, partner at Tiger Global.
Oxyzo’s cumulative disbursements currently exceed $2 billion. This includes the amount that is being lent and which is remitted back after the loan is repaid, usually within 90 days.