OfBusiness Business Model | How OfBusiness Makes Money
By providing supply chain financing, raw material procurement, and customized loan facilities, OfBusiness aims to meet the financial needs of companies in a range of industries. By giving them access to operating finance and streamlining procurement procedures, OfBusiness seeks to empower SMEs.
About OfBusiness
Established in 2015 by Asish Mohapatra, Bhuvan Gupta, Ruchi Kalra, Vasant Sridhar, and Nitin Jain OfBusiness is a fintech startup based in India that focuses on offering cutting-edge financing options and procurement services to the nation's small and medium-sized businesses (SMEs). By meeting their financial and operational demands, its technology-driven SME financing platform helps SMEs grow. The organization has created proprietary algorithms to predict business performance and do financial profiling of SMEs using non-traditional data sources. More than 1000 SMEs from more than ten industries, including manufacturing, healthcare, and construction, make up OfBusiness' diverse clientele. The company is based in Gurgaon, India, and employs more than 300 individuals.
Sarika Anand
OfBusiness Business Model
Lending and procurement services are the foundation of OfBusiness's business model. In terms of lending, the business provides working capital loans and other financial solutions that are suited to the unique needs of SMEs. In terms of procurement, the platform helps companies find products and raw materials at affordable costs by negotiating with suppliers to guarantee cost-effectiveness. OfBusiness has established itself as a key partner for SMEs looking for comprehensive solutions to improve their operational efficiency and growth through its twin approach of offering financial support and streamlining procurement procedures.
How OfBusiness Make Money | OfBusiness Revenue Model
OfBusiness generates revenue by integrating several business models.
- Generating revenue through financial lending: Ofbusiness is a great alternative for SMEs because it offers loans up to $20 million at a rate of 15-18%, compared to 24-48% offered by local lenders and dealers. The corporation makes 43% of its total income from these low-interest loans.
- Generating revenue through the sale of raw materials: Sales of raw materials account for about 55% of the company's total revenue.
- Generating revenue through eCommerce: At present, OfBusiness' eCommerce activities generate a profit margin of 5-10% on sales. However, the company plans to acquire more companies to boost this margin to 20% and obtain a better grip on the supply chain.
OfBusiness Financials FY24
| OfBusiness Revenue Breakdown | FY22 | FY23 | FY24 |
|---|---|---|---|
| Operating Revenue | INR 7,140 crore | INR 15,343 crore | INR 19,296 crore |
| Total Expenses | INR 6,994 crore | Rs 15,037 crore | INR 18,696 crore |
| Profit/Loss | Profit of INR 201 crore | Profit of INR 463 crore | Profit of INR 603 crore |
OfBusiness has shown significant growth in recent years. In FY22, the company reported an operating revenue of INR 7,140 crore and a profit of INR 201 crore. By FY23, its revenue surged to INR 15,343 crore with a profit of INR 463 crore, and in FY24, revenue further grew to INR 19,296 crore, with a profit of INR 603 crore. Total expenses also increased in line with the revenue growth, reaching INR 18,696 crore in FY24.
USP of OfBusiness
To conduct financial profiling and provide performance predictions, OfBusiness makes use of proprietary algorithms and non-traditional data sources. This method reduces the usual dangers of small and medium enterprise (SME) loans, opening the door to more accessible banking services. A lot of people are interested in this new model. With a diverse customer base of over a thousand SMEs spanning over ten sectors, including construction, healthcare, and manufacturing, OfBusiness is experiencing relentless growth, mirroring the sentiment expressed by Gartner's report that companies utilizing advanced data analytics are 23% more likely to experience revenue increases.
SWOT Analysis of OfBusiness
OfBusiness Strengths
- Strong emphasis on serving a varied clientele within the industrial sector.
- Effective management of the supply chain allows for the efficient delivery of services.
- Dynamic executive team with extensive expertise in the field.
- Opportunity to tap into India's extensive supplier and manufacturer network.
OfBusiness Weaknesses
- The potential for expansion could be stunted if the Indian market is over-emphasized.
- Possible obstacles to implementing and enforcing quality control measures over an extensive supply chain.
- Prone to changes in the economy that have an impact on manufacturing.
- Logistics and inventory management contribute significantly to the high operational costs.
OfBusiness Opportunities
- Industrial goods and services are seeing a surge in demand in developing economies.
- Opportunity for growth in foreign markets, decreasing dependency on India.
- Improved operational efficiency and stronger consumer engagement can be achieved through technological developments.
- The quality of services provided might be improved by joint ventures with other companies in the sector.
OfBusiness Threats
- There is a lot of rivalry in the industrial sector from both well-established companies and new ones.
- Investment in industrial goods and consumer expenditure are both affected by economic downturns.
- Constant investment and adaptability are required due to the rapid pace of technological progress.
- Both pricing tactics and profit margins are susceptible to fluctuations in the cost of raw materials.
Sakshi Jadhav
Conclusion
As a company, OfBusiness is well-positioned for growth because of its solid base and history of success. The company's long-term goal is to provide SMEs with even more advanced solutions by expanding its operations throughout more regions and enhancing its technology infrastructure. An integral part of this growth will be the ongoing improvement of their data analytics capabilities and unique algorithms. Ultimately, OfBusiness stands out in the SME environment as an innovative and inclusive fintech firm. Providing all-encompassing procurement and finance solutions, OfBusiness has made a significant mark on the Indian economy and established itself as a unique player in the market. Looking forward, OfBusiness's story will be one of unfaltering support for small and medium-sized enterprises (SMEs), the bedrock of every economy, and continuous development and innovation.
FAQs
What is OfBusiness?
OfBusiness is an Indian B2B platform that provides small and medium enterprises (SMEs) with two core services: lending and procurement. It offers working capital loans tailored to SMEs' unique needs and helps them procure raw materials and products at competitive prices by negotiating with suppliers.
What is OfBusiness business model?
OfBusiness operates a dual business model, offering SMEs tailored working capital loans and affordable procurement services by negotiating with suppliers, boosting efficiency and growth.
How does OfBusiness make money?
OfBusiness earns through loan interest and margins on procurement services.
Who are OfBusiness founders?
The company was founded in 2016 by husband-wife duo Asish Mohapatra and Ruchi Kalra, along with Vasant Sridhar, Bhuvan Gupta, and Nitin Jain.
