Oxyzo Financial Services said on March 23 that it has raised $200 million in Series A funding at a $1 billion valuation, making it the highest first-round financing by an Indian business. Alpha Wave led the unicorn round, which was joined by Tiger Global, Norwest Venture Partners, Matrix Partners, and Creation Investments.
Oxyzo began as the lending platform of OfBusiness, offering cash flow and matching working capital finance for SMEs in manufacturing and subcontracting to purchase new materials.
It expanded its product line and customer base to include SMEs, mid-sized corporations, and new-economy businesses. It manages $350 million in assets and claims to have been profitable since its beginning.
Both OfBusiness and Oxyzo have a solid borrowing profile that is trusted by more than 50 financial institutions according to Asish Mohapatra, CEO of the OfBusiness Group.
Ruchi Kalra, his wife and co-founder, who is also the CEO of Oxyzo, said, “We see a dramatic shift in the growing needs and servicing strategy in the B2B segment with the rise of the digital economy.” As a diverse financial services organization, we aspire to be at the forefront of this, distinguishing ourselves through new financial products and digital platforms, as well as excellent credit and origination skills.
Kalra will become one of the few Indian female founders of a lucrative financial startup as a result of this. She has been operating the financing business at OfBusiness and is planning an IPO this year. She is an alumna of IIT-Delhi and the Indian School of Business.
Before co-founding OfBusiness with spouse Asish Mohapatra and others in 2015, she was a partner at management consultancy firm McKinsey. Mohapatra worked at McKinsey as an Engagement Manager and at Matrix Partners as the Healthcare Investments Lead.
The funds will be used to organically and inorganically expand Oxyzo’s broader digital financial services, including scaling the supply chain marketplace, creating novel fixed-income products for SMEs, and scaling additional fee-based business lines, such as debt capital markets and securities. This will also be the first time in India that a husband-wife team has developed two unicorns.
Existing investors Alpha Wave Global, Tiger Global Management, and SoftBank led a $325 million round for business-to-business commerce and financing platform OfBusiness. OfBusiness’ valuation has more than doubled in the last year, to $5 billion, thanks to an unparalleled funding boom. In April, it was estimated to be worth $800 million, then $1.5 billion in July, $3 billion in September, and $5 billion in December 2021.
Following the outbreak, the Reserve Bank of India (RBI) used interest rate cuts and other instruments to inject liquidity into the economy. The recovery of small enterprises coincided with the recovery of the Indian economy, and lending to SMEs increased.
The pandemic also spurred the adoption of digital financial services in India and SMEs are happy to spend less time managing their money by using online tools on fintech platforms. With small loans sanctioned in just about a day, more small business owners are turning to fintech for working capital and other loans.
