OfBusiness racks up $5m Series A Round Funding
OfBusiness, a three month-old online marketplace for business-to-business (B2B) commerce, has raised $5 million in its first round of funding led by Matrix Partners India. The fund-raising comes at a time when the size of series A cheques is shrinking after the highs of last year. Ola’s co-founder & CEO Bhavish Aggarwal and Apoorva Patni of the Patni family, along with a bunch of other angels, have also come on board the Gurgaon-based startup.
Catering largely to small and medium-sized enterprises (SMEs), OfBusiness is operational in10 states across the two verticals of construction and manufacturing, with plans to enter healthcare soon. Some of the other funded players in the B2B commerce sector include Industry Buying, Moglix, IndiaMART and mSupply.com, among others. However, unlike the business-to-consumer e-tailers, these ventures have not been flush with funds.
“The transaction sizes in B2B commerce have to be very high for the business to be made sustainable. Also, you need to have high repeat materials on your platform. Besides that, creating a robust supply chain which includes finding the right suppliers and a cost-efficient logistics network have been the biggest challenges so far. We’ve been able to work on all these things in a very short period of time,” said Asish Mohapatra, co-founder & CEO OfBusiness. Mohapatra said almost 80% of the company’s revenues were from smaller cities.
Unlike the other B2B commerce ventures, OfBusiness claims it is dealing largely with big-ticket orders along with providing its own logistics to sellers on its platform. It has a 40-member field force which is currently helping business owners transact online.
“SMEs in India are already using the internet (through Whatsapp) for information sharing and communication. We believe in the OfBusiness vision that these SMEs are ready to transact, beginning in an assisted manner for all their monthly purchases,” said Vikram Vaidyanathan, MD, Matrix India.
“In the last year or so, multiple B2B commerce players have emerged in the online space which is still in a nascent stage. Compare that to a market like the US where online B2B has taken over B2C in terms of size. We have transacted with over 2 lakh businesses who have made purchases at least once on our platform. Most of our businesses are from tier II and tier III towns,” said Brijesh Agarwal, founder of Tolexo.
Originally published on Times Of India