There might not be a lot of Indian startups that are making money, but the ones that are are now pulling in the big bucks.
Infra-tech startup OfBusiness has reported a profit of Rs. 463 crore in FY23, up from Rs. 356 crore in FY22. Its financial arm Oxyzo, meanwhile, has reported a profit of Rs. 197 crore in FY23, up from Rs. 69 crore in FY22.
“(OfBusiness) has also expanded into global markets through export and imports which shall further add to the health and profitability of the platform,” said OfBusiness CEO Asish Mohapatra. “Going forward, as India is expanding rapidly in manufacturing and infrastructure, OfBusiness aspires to consolidate its leadership position in B2B by expanding its global footprint and going deeper into its supply chains through recent investments,” he added.
OfBusiness and Oxyzo are in the handful of Indian startup unicorns that are profitable. OfBusiness was the fifth most profitable startup unicorn in India last year behind Zoho, Zerodha, Mu Sigma and Citrus Tech. It’s a rarefied club to be in — less than twenty percent of India’s 107 startup unicorns are profitable.
More impressively, OfBusiness and Oxygo are run by a husband-wife duo. OfBusiness’s CEO is Ashish Mohapatra, while his wife Ruchi Kalra leads Oxyzo. Both had studied at IIT and worked at McKinsey before launching their businesses in 2015 along with Nitin Jain, Vasant Sridhar and Bhuvan Gupta.
OfBusiness is a tech platform for sourcing raw material and credit for small businesses. In 2017, OfBusiness had launched Oxyzo, a separate division for lending. OfBusiness had grown quickly — after becoming a unicorn in August 2021, OfBusiness had attained a valuation of $5 billion by December 2021. Oxyzo has then been carved out of the OfBusiness as a separate company, and has raised external capital. Ozyzo had become a unicorn in March 2022. The two businesses have natural synergies — while OfBusiness is a platform for sourcing raw material, Ozyzo provides financing for buying these raw materials. Until last year, as much as 30% of Oxyzo’s business came from OfBusiness’ customers.
And for both these companies to be hundreds of crores in the black is an outlier — twice over — for India’s startup ecosystem. Most of India’s startups are mired in losses — some of the biggest names, including the ones which have gone public such as Paytm and Zomato, have never made a profit in their existence, while other names such as Oyo Rooms, Unacademy and Swiggy have also always made losses. Amidst all this, a couple has managed to create not one, but two startups that are not just profitable, but are making profits in the hundreds of crores. Which just goes to show that it’s not impossible to make profits as an Indian startup — picking the right industry, quickly getting paying customers, and executing frugally can take one there.
fBusiness had been founded in 2015 by Asish Mohapatra, Nitin Jain, Ruchi Kalra, Vasant Sridhar and Bhuvan Gupta as a tech platform for sourcing raw material and credit for small businesses. OfBusiness had launched Oxyzo, a separate division for lending, in 2017. OfBusiness had grown quickly — after becoming a unicorn in August 2021, OfBusiness had attained a valuation of $5 billion by December 2021. Oxyzo has then been carved out of the OfBusiness as a separate company, and has raised external capital. The new investors in Oxyzo are common for OfBusiness too, except for SoftBank which has yet to invest in Oxyzo. Ozyzo had become a unicorn in March 2022.
The two businesses have natural synergies. While OfBusiness is a platform for sourcing raw material, Ozyzo provides financing for buying these raw materials. Until last year, as much as 30% of Oxyzo’s business came from OfBusiness’ customers.
OfBusiness and Oxyzo also have the unique distinction of being two unicorns which are each led by a husband-wife couple. OfBusiness’s CEO is Ashish Mohapatra, while his wife Ruchi Kalra leads Oxyzo. Both had studied at IIT and worked at McKinsey before launching their businesses. But more impressively, both startups are profitable — while OfBusiness had reported a profit of Rs. 201 crore last year, Oxyzo has reported a profit of Rs. 197 crore this year.
And this is an outlier — twice over — as far as India’s startup ecosystem is concerned. Most of India’s startups are mired in losses — some of the biggest names, including the ones which have gone public such as Paytm and Zomato, have never made a profit in their existence, while other names such as Oyo Rooms, Unacademy and Swiggy have also always made losses. Amidst all this, a couple has managed to create not one, but two startups that are not just profitable, but are making profits in the hundreds of crores. Which just goes to show that it’s not impossible to make profits as an Indian startup — picking the right industry, quickly getting paying customers, and executing frugally can take one there.
The company’s jump in revenue and PAT comes mainly on the back of its expansion into the marketplace with more value-added-products as well as its penetration into global markets during the last financial year.
ALSO READ: SoftBank-backed OfBusiness defers IPO plans by 3 months on weak market cues
“The company has also expanded into global markets through export and imports which shall further add to the health and profitability of the platform,” OfBusiness’ cofounder Ashish Mohapatra said in a statement on October 26.
The firm’s total expenses during the year under review rose 115 percent to Rs 15,037 crore. The company’s employee benefit expense amounts to Rs 326 crore in FY23. Overall Ebitda rose 120 percent to Rs 998 crore.
OfBusiness, founded in 2015 by Asish Mohapatra, Vasant Sridhar, Bhuvan Gupta, Nitin Jain, Ruchi Karla, and Srinath Ramakkrushnan, has raised nearly $900 million in 11 funding rounds to date.
It has raised $802 million in 2021 alone. OfBusiness offers technology-led full-stack solution that spans material fulfilment, technology solutions and working capital financing to enterprises. It diversified its product suite and widened the customer base to include SMEs, mid-corporates, as well as new-economy companies.
Its revenue opportunity and match making marketing platform – Bidassist – has over 1.2 million registered users, OfBusiness’ statement said.
OfBusiness has been considering an IPO since December 2021, when it raised $325 million from existing investors Alpha Wave Global, Tiger Global Management, and SoftBank, increasing its valuation to $5 billion from $1.7 billion.
Initially, the SoftBank-backed firm planned an IPO in 2022, but Asish Mohapatra, its co-founder and CEO (chief executive officer), announced in August on CNN-News18’s Bits to Billions that it had postponed its plans by at least three months. Mohapatra said that OfBusiness intends to go public in 2023.
OfBusiness’ financing platform, Oxyzo which provides cash flow-matched working capital solutions to SMEs had reported a consolidated Assets Under Management (AUM) of Rs 5000 crore for FY 23 and has recently expanded to various fee income adjacencies that makes it more relevant to its borrowers.