ET Startup Awards 2023: OfBusiness profits at scale to bag top prize

Business-to-business ecommerce venture OfBusiness was voted as The Economic Times Startup of the Year 2023 surging ahead of competition on the back of strong revenue backed by handsome profits. The eight-year-old venture was feted for its value proposition and focus on SMEs, which are regarded as the backbone of India’s fast-growing economy.

The eleven-member jury chose the B2B venture, which is currently valued at about nearly $5 billion, over eyewear retailer Lenskart in a closely fought contest that included detailed discussions on the relative merits of both companies.

“There are some, very few, moments in life when you just feel grateful, happy, content and proud, all in one,” Asish Mohapatra, cofounder, and chief executive of OfBusiness told ET on being selected as the winner of India’s most coveted award for entrepreneurial excellence.

OfBusiness said that it has posted revenue of Rs 15,200 crore with profits of Rs 460 crore in fiscal 2023.

Commending the scale achieved by the company, one of the jurors remarked that it was more akin to a corporation rather than a startup. “They (OfBusiness) have decided on M&A also as a strategy which has added to their overall topline and bottom-line,” the person pointed out.

Earlier, Lenskart and OfBusiness had emerged as the top two contenders for the ET Startup of the Year award.

The jury debated the numerous factors that go into making a winner across the B2B and the consumer internet category. Finally, the sheer scale posted by OfBusiness would carry the day even as the jurors acknowledged the strong execution capabilities displayed by Lenskart.

The eyewear retailer has built a robust omnichannel platform that has made the brand near-ubiquitous across both metro and non-metro markets, while also clocking profits.

The jurors discussed how both the startups were in different sectors–Lenskart being consumer-focused while OfBusiness is a B2B venture. Eventually, the jurors would pick OfBusiness with one of them noting that this choice underscored the growth of several leading B2B commerce ventures in India.

OfBusiness is also evaluating an initial public offering next year at a time when retail investors are clearly favouring profit-making new-age ventures. OfBusiness enables access for users (buyers and suppliers) to over one hundred raw material product categories such as steel, iron, and chemicals. Its marketplace has 1.3 million SMEs. OfBusiness is backed by the likes of SoftBank Vision Fund, Alpha Wave Global, Matrix Partners India and others.

“I think an intersection of size of opportunity, passion of people and goodwill generated through the right intent of execution and governance,” Mohapatra said on the firm’s growth in the last year. “Nobody would build for SMEs, though, they are the fat middle of India's economy and 40% of India's GDP. Nobody would combine the youth of India, though they are in the face, out to charter a new India: we are a median age of 25.”

The company said it recorded group revenue of Rs 15,200 crore, net of GST, showing 2X growth while profits jumped from Rs 201 crore in FY22 to Rs 460 crore in FY23. This includes its lending business housed under Oxyzo. Cofounder Ruchi Kalra is the CEO of Oxyzo. Vasant Sridhar–another cofounder of OfBusiness–also spends time in running Oxyzo. Bhuvan Gupta and Nitin Jain are the other two co founders of OfBusiness. Mohapatra and Kalra are married to each other.

Juror Shekhar Kirani, partner, Accel, said, “MSMEs are the backbone of the Indian economy. OfBusiness, a leader among many B2B companies, drives innovation and accelerates economic growth in the MSME sector. We are still in the early days of the B2B opportunity in India, and OfBusiness’s immense contribution to this ecosystem is a signal to be structurally bullish for this category. Congratulations to them on behalf of all of us in the ecosystem.”

OfBusiness, since inception in 2015, has raised around $891 million. The firm integrates technology to SMEs' buying behaviour to make available better products, at better prices, in better timelines to customers with online and offline support. It provides SMEs access to cash flow-based financing for buying raw materials through Oxyzo–which has its own NBFC and other lending partners too.

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Other contenders

Lenskart

Lenskart specialises in selling prescription eyewear as well as sunglasses to consumers through its online platform and offline stores. It has also set up a Thrasio-style venture, Neso, to invest in new-age eyewear brands and sell them through its platform globally.

Mamaearth

Beauty and skincare brand Mamaearth started out as an online brand, but now operates across channels. Its parent Honasa Consumer is an omnichannel direct-to-consumer FMCG firm that has built other brands such as The Derma Co and Aqualogica.

Groww

Groww is a wealthtech startup that offers investors mutual funds, trading in stocks (as a stockbroker) and fixed income investment options such as fixed deposits. Over the last year, Groww has diversified into payments through Groww Pay, which runs on UPI, and consumer loans.

Icertis

Icertis provides an intelligent contract lifecycle management software that helps businesses manage their contracts, identify risks and reduce their compliance burden. The company, which has emerged as one of the largest software companies helmed by Indian founders, in terms of revenue, has been actively focusing on integrating Generative AI in its product suite.