Online B2B gets more attractive; OfBusiness another company to receive major investment funding
By Rebecca Menezes 
Online business to business is a lesser spoken of form of online selling. But according to experts online B2B is the next big thing. Last month, a business to business ecommerce player Udaan, a Flipkart alumnae product, raised significant capital. Ten million US dollars to be exact.
Recently another B2B ecommerce company, that goes by the name OfBusiness raised Rs.75 crore, despite the funding slowdown. The round of investment was led by Zodius Technology Opportunities Fund with participation of the company’s backer Matrix Partners India.
What does OfBusiness plan to do with its funding?
Former director at Matrix, Asish Mohapatra, ex-vice president of Snapdeal, Bhuvan Gupta and former McKinsey partner Ruchi Kalra founded the B2B company OfBusiness. The B2B firm claims it was able to attain profitability at net contribution margin positive level by focusing on specific states rather than dividing attention all across the country.
#1 – Expansion
The Gurgaon based company started off in January and now operates in five states and focuses on construction and manufacturing sectors. The five stares is currently operates in are Tmail Nadu, National Capital Region, Andhra Pradesh, Odisha and Maharashtra. There are plans of expanding further to another five states which will take the company’s presence to a total of 30 clusters.
“Rather than a wide presence we have focused on 10 clusters.Both construction and manufacturing are big sectors, and we wanted to go deep into geographies we are in,” says the company’s sales lead Mohapatra.
“We are focusing more on profitability, better working capital management, higher transaction sizes and focusing more on value from already acquired customers,” he adds.
The new funding received makes a total capital of Rs.110 crore for the 18 month old company. OfBusiness is looking to establish a marketplace for medium and small enterprises. The startup is trying to catch up with competitors like Power2SME as quickly as possible. Power2SME saw a total turnover of Rs.350 crore in FY 2016 and was setup in 2012.
OfBusiness said that it has served over 700 customers, with a repeat rate of over 60%.
#2 – New business
In the future, the firm intends to set up a non-banking finance company subsidiary with Kalra in charge. It will:
- Map customer data
- Offer specific products for small and medium enterprises (SMEs)
- Lend to SMEs
Presently, the B2B company is tied up with other non-banking finance companies to provide loans to entrepreneurs.
More investments in B2B
The attractiveness of B2B selling in ecommerce is growing. This year India MART and Udaan raised capital for their B2B companies. Global etailer Alibaba and Amazon have also invested this year in B2B company operation in India.
The MD at Zodius (which backs B2C etailer like Pepperfry, Zivame and Bigbasket) , Gautam Patel says, “We have been scoping for an investment in this space for one and-half years. We wanted to invest in a company which is a high-touch model, where we found OfBusiness’ cluster model very interesting. Companies also have to serve two major requirements of merchants -an avenue for credit, and some professionalism in terms of on time delivery to the merchant, which we believe is their differentiator.”
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