OfBusiness financial arm Oxyzo raises $200 mn in Series A funding round

OfBusiness financial arm, Oxyzo Financial Services, a tech-enabled smart financing solution provider, turned unicorn after raising $200 million in a Series A round led by Alpha Wave and co-led by Tiger Global, Norwest Venture Partners, Matrix Partners and Creation Investments.

Oxyzo started as OfBusiness Group’s financing platform that provided cash flow matched working capital financing for buying raw materials for SMEs in the traditional sectors of the economy such as manufacturing and sub-contracting. However, the company has always been a 100 per cent subsidiary of OfBusiness. Close to 75 per cent of the shareholding in Oxyzo is held by OfBusiness.

Ruchi Kalra, chief executive officer and co-founder at Oxyzo, said that the firm's operations and lending were never purely dedicated to OfBusiness clients. “We have always focused on creating our own balance sheet and hence our book balance has always been growing well. Over 70 per cent of lending from Oxyzo is for companies outside of OfBusiness,” she added. Oxyzo has grown to an AuM of $350 million with a 100% Y-o-Y growth while maintaining its GNPA at 1.2% even through the Covid period.

The funds will be used to expand Oxyzo’s broader digital financial services play organically and inorganically across a strong own balance sheet play, scaling the supply chain marketplace, launching innovative fixed income products for the SME space, and scaling other fee incomes business lines including debt capital markets and securities.

Oxyzo expanded to value chains beyond OfBusiness’ B2B raw material platform with diversified product suite and a broader customer base to include SMEs, mid-corporates, as well as the new age economy. With this, the company has now leveraged its strong supply chain data warehouse, basis its cumulative disbursements of $2 billion across 30,000+ nodes to build a digital supply chain and embedded finance marketplace that aims to solve for the under-penetrated formal credit in the B2B economy.

The company has leveraged proprietary tech systems to ensure proactive monitoring and operating efficiencies at scale resulting in the business having an opex of 2.5%.

Further, Oxyzo’s recently launched fixed income and securities business line has achieved cumulative market volume of over $1.6 billion in the last 6 months. Kalra also shared that Oxyzo has been profitable since its inception and currently at a 5.5%+ pre-tax RoA.

Ask Kalra about being a women heading a unicorn, she is quick to clarify: “It is about teamwork. Besides, all five of us have worked hard on these two entities. Going ahead Vasant (Vasant Sridhar, co-founder) and I will be focusing more on Oxyzo,” she added.

Oxyzo aims to continuously innovate in B2B financial services space through end-to-end capabilities across origination, deployment, curated structuring and distribution enabled through technology.

Niren Shah, MD and head, Norwest Venture Partners India, stated, “We have been delighted with our early investment in Ofbusiness and feel privileged to get an opportunity to partner with them once again, this time co-leading a $200m round to fund Oxyzo, the SME Fintech business. We are impressed with how the Oxyzo team has built a high growth business with robust corporate governance and are even more excited with their vision to build this into India’s most profitable, tech-driven, B2B SME fintech player. We are proud to congratulate Ruchi on becoming the first female founder in India of a profitable, fintech unicorn!”