OfBusiness: Cracking B2B Commerce with Data and Credit

If you are a SMSE in India, you might be aware that B2B commerce in India has always been a chaotic space—fragmented supply chains, lack of price transparency, delayed payments, and working capital struggles. SMEs (small and medium enterprises), which form the backbone of the country’s economy, often find it hard to source raw materials at competitive prices or secure timely credit to fulfill orders. While B2C startups like Flipkart and Swiggy had transformed consumer commerce, B2B remained largely untouched.

Securing a business loan meant endless paperwork, frustrating wait times, and high rejection rates? That’s exactly the problem OfBusiness set out to solve. Founded in 2015 by Asish Mohapatra (ex-Matrix Partners, IIT KGP, IIM Ahmedabad) along with a strong founding team, OfBusiness identified a major gap: small and medium enterprises (SMEs) were struggling to access credit and raw materials efficiently. Banks were hesitant to lend, citing high risks, while NBFCs had limited reach.

So, instead of just providing credit, OfBusiness went one step further—offering raw material procurement, financing, and growth capital, all bundled into one platform. The vision was clear: Make B2B commerce seamless, with financing as an enabler.

And how exactly did they do it? That’s what today’s case study is about. So, let’s dive right in!

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About the founder: Setting the foundation

Ashish Mohapatra, born in 1980 in Cuttack, Odisha, grew up in an academically inclined family and pursued Mechanical Engineering at IIT Kharagpur, followed by an MBA from ISB Hyderabad. His career spanned McKinsey & Company and Matrix Partners before co-founding OfBusiness in 2015, a B2B commerce and fintech platform streamlining SME financing and raw material procurement. Despite initial investor rejections, he scaled OfBusiness into a profitable unicorn, reporting ₹603 crore profit and ₹19,000 crore revenue in FY24. In 2016, he and his wife, Ruchi Kalra, co-founded Oxyzo, another fintech unicorn, making them India’s first couple to build billion-dollar companies separately. Known for his emphasis on financial discipline and execution, Ashish’s leadership philosophy prioritizes sustainable growth over hype, setting him apart in India’s startup ecosystem.

Identifying the pain points of SMSEs

SMSEs in India have always been in a constant state of unorganized growth, struggling with fragmented supply chains, limited access to credit, and inefficiencies that hinder their scalability and financial stability. More details about these below:

1. Fragmented Raw Material Procurement: SMEs in manufacturing and infrastructure struggle with sourcing raw materials like steel, chemicals, and polymers due to unorganized supply chains, lack of price transparency, and unreliable vendors.

2. Lack of Access to Affordable Credit: Most SMEs face difficulties securing loans from traditional banks due to high collateral demands, lengthy approval processes, and limited financial documentation.

3. Limited Financial Discipline Among SMEs: Businesses constantly struggle with cash flow management and financial discipline, leading to operational inefficiencies.

4. Scalability and Efficiency Challenges for SMEs: SMEs often lack the resources to scale due to inconsistent supply chains and cash flow constraints.

By addressing these pain points, OfBusiness has positioned itself as a profitable, data-driven B2B platform that merges commerce with smart financing to drive sustainable growth for SMEs in India. How exactly did they do it?

The Playbook: Credit + Commerce + Data

Instead of just being just a procurement platform, OfBusiness operates at the intersection of commerce (raw material sourcing), financing (working capital loans), and intelligence (market insights).

1. Commerce: Solving Procurement Pains

• OfBusiness provides a digital marketplace where SMEs can source bulk industrial goods like metals, chemicals, plastics, and agricultural products.

• By eliminating middlemen, it offers better pricing and assured quality.

• The company leverages tech to provide demand aggregation, ensuring better economies of scale for buyers.

2. Credit: The Embedded Financing Advantage

• SMEs often struggle with cash flow. OfBusiness offers short-term working capital loans (invoice financing) through its NBFC arm, Oxyzo.

• Unlike banks, which take weeks for loan approvals, OfBusiness makes credit decisions within 48 hours based on real-time transaction data.

• The company charges a 1.5-2% monthly interest rate on credit, which significantly enhances its margins.

3. Data: The Secret Sauce

• OfBusiness doesn’t just finance blindly. It uses AI-driven analytics to assess SME creditworthiness based on purchasing patterns, payment cycles, and order volumes.

• This data-driven approach allows OfBusiness to maintain a low NPA (Non-Performing Assets) ratio while rapidly scaling its loan book.

And how does OfBusiness makes money out of this?

Revenue Streams: How OfBusiness Makes Money

Unlike traditional lenders who rely solely on interest income, OfBusiness has built a multi-layered revenue model, making it more resilient and profitable.

1. Interest on Loans

   A core revenue stream comes from short-term financing provided to SMEs for raw material purchases. With interest rates ranging from 16-20% annually, OfBusiness operates at a higher yield than traditional banks while maintaining a low-risk profile.

   But what makes its lending unique?

   • Collateral-Free Credit: Unlike banks that demand high collateral, OfBusiness offers unsecured working capital, making credit more accessible for SMEs.

   • Data-Driven Underwriting: Instead of relying on traditional credit scores, OfBusiness uses deep AI-driven analytics to assess SME creditworthiness, allowing them to underwrite loans faster and more accurately.

   • Low Default Rates: Thanks to its strong underwriting engine, loan defaults remain low, ensuring sustainable profitability.

2. Trade Margins

   Beyond lending, OfBusiness acts as a B2B raw material supplier, sourcing bulk materials like steel, polymers, and chemicals at lower prices and selling them to SMEs. This commerce-first approach generates revenue through:

   • Bulk Buying Power: OfBusiness leverages large-scale procurement to negotiate lower supplier costs, earning a margin on every transaction.

   • Integrated Logistics & Delivery: Ensuring fast, cost-effective deliveries improves customer experience while adding another revenue layer.

   • Cross-Selling Financing: Many SMEs purchasing raw materials also require credit, leading to repeat customers and higher lifetime value (LTV).

3. Tech-Enabled Services

   With its proprietary AI and machine learning models, OfBusiness provides real-time credit assessment, procurement analytics, and supply chain optimization. These data-driven insights help SMEs:

   • Optimize Purchases: Predicting price fluctuations allows SMEs to buy materials at the right time, reducing costs.

   • Improve Cash Flow Management: AI-powered insights help businesses balance financing needs with procurement cycles.

   • Enhance Creditworthiness: SMEs with better purchasing and repayment behavior can unlock better financing rates over time.

Growth Trajectory: Scaling to a $5 Billion Valuation

Since inception, OfBusiness has witnessed explosive growth. Here’s a short summary:

• Revenue Surge: Grew from ₹200 crore (~$25M) in FY18 to ₹7,000 crore (~$850M) in FY23.

• Profitability: Unlike most fintech startups, OfBusiness has been profitable since FY21, thanks to disciplined lending and high repayment rates.

• Valuation Boom: Raised multiple funding rounds, hitting a valuation of $5 billion in 2023.

• IPO Plans: As per reports, the company is gearing up for an IPO by 2025.

 Competitive Edge: What Sets OfBusiness Apart?

While multiple fintech players offer SME financing, OfBusiness enjoys key advantages:

• High-Ticket, High-Frequency Transactions: Unlike consumer lending, SME procurement means larger ticket sizes and recurring purchases, ensuring steady cash flows.

• Superior Underwriting: Proprietary AI-driven credit scoring reduces NPAs (non-performing assets), making lending more sustainable.

• Strong Founding Team: Asish Mohapatra & team have deep experience in finance, commerce, and tech, making execution top-notch.

• Vertical Expansion: Spun off Oxyzo, a separate lending arm that raised $200M at a $1 billion valuation, ensuring dedicated focus on credit.

Challenges: What Could Go Wrong?

No success story is without risks. OfBusiness too faces challenges such as:

• Economic Slowdowns: SME lending is cyclical—economic downturns could impact repayments.

• Competition from Banks & Fintechs: Traditional banks are digitizing fast, and fintechs like Khatabook & CredAble are eyeing the B2B credit space.

• Supply Chain Disruptions: Since a major part of the business is raw material procurement, global supply chain disruptions could affect margins.

The Road Ahead: Can OfBusiness Maintain Its Momentum?

With a $5 billion valuation, sustained profitability, and a potential IPO on the horizon, OfBusiness has already proven its ability to scale in the SME lending and procurement space. But what’s next?

1. Strengthening Its Hold on SME Lending

   While OfBusiness has built a solid lending foundation, the SME credit gap in India is over $300 billion—a massive untapped opportunity. The company will likely:

   • Expand its credit offerings to include longer-term loans and customized financial products.

   • Further refine its AI-driven underwriting models to reduce NPAs while approving credit faster.

   • Strengthen Oxyzo, its lending arm, by expanding into newer industries and possibly launching consumer-like financial products for SMEs.

2. Expanding the Raw Material Ecosystem

   Raw material procurement remains at the heart of OfBusiness's commerce play. To scale further, the company could:

   • Broaden its supplier base to include newer raw materials beyond metals, chemicals, and polymers.

   • Strengthen supply chain and logistics partnerships to improve delivery speeds and reduce costs.

   • Explore international sourcing and procurement, helping SMEs access better-quality materials at competitive rates.

3. Going Beyond India: International Expansion?

   While OfBusiness has dominated the Indian B2B fintech space, global markets—especially Southeast Asia and the Middle East—face similar SME credit challenges

   • Expanding into these regions could unlock new revenue streams and diversify market risks.

   • A tech-driven, asset-light expansion strategy could help OfBusiness scale globally without heavy infrastructure costs.

4. IPO and the Public Market Test

   Reports suggest OfBusiness is eyeing an IPO in 2025, which could:

   • Provide access to public capital for further expansion.

   • Cement its status as India’s leading SME fintech.

   • Increase scrutiny on profitability, governance, and long-term sustainability, making execution even more critical.

Final Thought: Can OfBusiness Keep Winning?

The fundamentals are strong, but challenges remain—competition, economic cycles, and credit risks could test its resilience. However, if OfBusiness successfully scales its commerce-finance model while maintaining profitable growth, it won’t just be a fintech success story—it will redefine SME financing in India and beyond.

This wraps up another fascinating journey, one that I thoroughly enjoyed sharing with you. I hope you found it as intriguing as I did! If you did, don’t forget to spread the word within your network. And if you haven’t subscribed to Think Tank yet, now’s the perfect time—just click the link below!

I will get back to you with more stories like these. In the meantime, take a look at these other interesting case studies:

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Until then,
Happy Reading!