Matrix Backed SME Lending Platform OfBusiness Secures US$3.8Mn Debt Funding From Kotak Mahindra Bank

Matrix Backed SME Lending Platform OfBusiness Secures US$3.8Mn Debt Funding From Kotak Mahindra Bank

Gurugram-based SME lending platform, OfBusiness running under OFB Tech Pvt. Ltd., has secured US $3.8 Mn (INR 25 Cr) in debt funding from Kotak Mahindra Bank.This round of funding comes is an addition to the $7.6 Mn (INR 50 Cr) working capital limit that the startup has raised earlier from the bank.

The newly raised debt funding will be used by the startup to expand its footprint, besides increasing its loan disbursal rate by reaching out to more small businesses in under served regions.

Matrix Backed SME Lending Platform OfBusiness Secures US$3.8Mn Debt Funding From Kotak Mahindra Bank
Matrix Backed SME Lending Platform OfBusiness Secures US$3.8Mn Debt Funding From Kotak Mahindra Bank

OfBusiness provides financing to small and medium enterprises, it offers a single-window platform to provide secured and unsecured credit to SMEs for procuring raw material. The loan amount is credited directly to the suppliers after the raw material reaches the borrowers.

Commenting on the development, OfBusiness co-founder and CEO Asish Mohapatra said, “We aspire to be SME’s growth partner by adding value to the SME’s life beyond financing. When it comes to getting secured and unsecured credit or cost-effective raw material procurement, SMEs are fully dependent on informal channels and local distributors. With an NBFC license and right cost of capital through our debt lines, we are bundling innovative lending and procurement solutions to address growing needs of SMEs in the country.”

SME lending platform OfBusiness was founded in 2015 by Asish Mohapatra, Bhuvan Gupta, Chandranshu, Nitin Jain, Ruchi Kalra and Srinath Ramakkrushnan in Gurugram.

The platform also aggregates these raw materials, including metals, polymers, papers and electrical ancillaries, thereby passing a bulk of the aggregation benefits to the SME across 22 clusters. By providing ‘purchase financing’, OfBusiness guarantees end use of the credit lines. Additionally, the platform also helps SMEs to find new business opportunities through Tender information packets.

Underwriting of loans by OfBusiness is done by not only evaluating the financial data, but also several other alternate data sources of SME operations, which are contributed by the SME community of buyers and sellers.

At present, OfBusiness has built a strong base across key industries including manufacturing (auto, power, engineering, capital goods, solar) as well as infrastructure with monthly disbursals worth over US $7.6 Mn (INR 50 Cr). It boasts an NPA of less than 1% and is looking to profitability by the next fiscal year.

Till date, the startup has raised funding in three rounds. Apart from the latest debt funding round from Kotak Mahindra, OfBusiness raised $5 Mn Series A investment from Matrix Partners India in February 2016.

Later in December last year, the startup secured another $11 Mn (INR 75 Cr) in a round led by Zodius Capital and Matrix Partners. The company counts Patni Group’s Apoorva Patni, Ola co-founder Bhavish Aggarwal, Quikr co-founder Pranay Chulet and Limeroad co-founder and CTO Prashant Malik as its investors.

In recent past, Power2SME and Lendingkart also raised funding, the startups are working in the same segment.

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