The fintech division of OfBusiness, Oxyzo, has obtained debt investment from AK Capital totaling INR 100 crore, or around $11.5 million. This calculated action seeks to improve the company’s financial standing and guarantee efficient daily operations.
Credits: Entrackr
Structure of the Debt Issuance
The allocation of 1,00,000 non-convertible debentures (NCDs) to AK Capital, each valued at INR 10,000, was approved by Oxyzo’s board, according a regulatory filing. These debentures have been issued with a 24-month term and will yield 9.75% annual interest. With this type of funding, Oxyzo can obtain long-term resources without reducing equity, guaranteeing the company’s financial stability as it grows.
How Oxyzo Plans to Use the Funds
The fintech unicorn has outlined clear objectives for utilizing the raised capital. The primary use cases include:
- Strengthening long-term financial resources to maintain a healthy liquidity position.
- Supporting day-to-day operational expenses to ensure seamless business continuity.
- Enhancing its embedded finance offerings and supply chain credit solutions.
Oxyzo’s Journey to Becoming a Fintech Powerhouse
With the goal of addressing the underutilization of formal credit in the Indian economy, Oxyzo was established as the fintech division of OfBusiness. After obtaining $200 million in its first round of funding from renowned investors like Tiger Global, Norwest Venture Partners, Alpha Wave, Matrix Partners, and Creation Investments, the startup became a unicorn in March 2022.
The business focuses in offering working capital, purchase financing, and embedded credit solutions that are specifically designed for SMEs. Oxyzo has emerged as a major force in the corporate lending market thanks to its strong emphasis on utilizing data analytics and AI-driven risk assessment.
Impressive Growth Metrics and Market Impact
With more than 40,000 nodes and over $2.6 billion disbursed, Oxyzo has shown impressive development. Businesses can now easily obtain loan solutions thanks to its unique tech-enabled supply chain and integrated financial marketplace.
The company’s solid financial status and creditworthiness are further demonstrated by its $360 million assets under management (AUM) and A+ rating from credit agencies ICRA and CARE.
The Role of Debt in Oxyzo’s Expansion Plans
For high-growth fintech firms like Oxyzo, securing debt financing is a crucial strategy to scale operations without equity dilution. By raising funds through NCDs, the company can:
- Expand its lending portfolio and cater to a larger SME base.
- Invest in advanced financial technologies to enhance credit underwriting and risk assessment.
- Strengthen its position in India’s embedded finance and B2B credit ecosystem.
The Road Ahead for Oxyzo
With this fresh infusion of capital, Oxyzo is poised to further solidify its role in India’s digital lending space. As the demand for SME financing continues to grow, the company’s ability to provide innovative credit solutions will be instrumental in driving financial inclusion.
Given its strong market position, robust investor backing, and strategic debt financing approach, Oxyzo remains well-positioned to scale its operations while maintaining financial prudence.
Credits: Inc 42
Conclusion
The INR 100 crore loan raise from AK Capital represents yet another important turning point in Oxyzo’s development. The fintech startup is pushing the limits of SME financing in India by using this funds to improve its lending capabilities and fortify its financial position. Oxyzo is poised to play a significant role in changing the commercial credit landscape in India with its data-driven strategy and dedication to innovation.
Additionally, businesses like Oxyzo are laying the groundwork for a more financially equitable economy as India’s fintech industry develops further. The company is at the forefront of embedded finance and digital lending thanks to its ability to combine technology with financial services. The smart use of debt and technological investments made by Oxyzo will be crucial differentiators in maintaining long-term growth as competition heats up and regulatory frameworks change.
