OfBusiness, which provides smart procurement and financing solutions to SMEs, aims to bolster MSMEs with a smooth supply chain system through the app.
Ofbusiness, a B2B unicorn, has launched a new app to help micro, small, and medium enterprises (MSMEs) procure raw materials and gain access credit. The app offers a comprehensive solution that enables business owners to source raw materials within the app, compare prices with vendors across India, manage orders, and track the live location of the shipment.
Through this app, OfBusiness will act as an aggregator for buyers, procuring raw material from the manufacturer and shipping it to the buyer without any collateral.
Nitin Jain, Co-founder, OfBusiness, says, micro-enterprises form the major chunk of the MSME ecosystem, and the app aims to bolster them with a smooth supply chain system.
Since its inception in 2015, the platform has catered to the needs of over 700,000 SMEs across 30 diverse business sectors. Jain attributes the success of the platform to its 200-strong sales team, which has played a pivotal role in ensuring seamless supply chain operations for SMEs.
The app supports 10 regional languages and the built-in AI allows the user to interact in conversation. The business owner can track the live location of the shipment, which will also help them plan their operations better. The app will enable OfBusiness to expand its services by delving deeper into the supply chain ecosystem and penetrate Tier III and IV towns, targeting micro enterprises with a revenue target of around Rs 35,000 crore for FY 23-24.
Jain says that the current procurement system is fraught with challenges, and that business owners in smaller towns often have to rely on distributors who charge exorbitant fees, or they will have to search for manufacturers by themselves, which can be a time-consuming and daunting task. Moreover, they may not be aware of the fair market price and could fall prey to unscrupulous middlemen. Even after a procurement deal is made, tracking the delivery can also be a hassle since there is no existing solution to do so, due to which sometimes the order is lost in transit or delayed.
At present, OfBusiness does not charge any subscription fee for the app, and for the next three to four months, it envisions engaging with MSMEs and taking their feedback.
With MSMEs facing severe cash flow issues, OfBusiness also lets them buy credit when in need. Jain says that MSMEs either rely on collateral loans or on credit buying where distributors may charge them two to four percent extra for purchase on credit, but OfBusiness enables them with collateral-free lending through its lending arm Oxyzo.
The company, which competes with IndiaMart and TradeIndia, is not just a listing platform but an interactive platform where real-time dealing happens. Also, unlike indicative pricing, the app shows its users live pricing of the raw materials, which can help them with better decision making.
In terms of monetisation, Jain states that ad banners will be the primary source of revenue for the app. Additionally, OfBusiness will charge a transaction fee of one to two percent, further bolstering the company’s revenue streams.
OfBusiness aims to reach 10 million MSMEs within six months of launching the app.
Its IPO launch, which was earlier supposed to happen in 2021, has been pushed second time in a row. Jain says, the push is because there is no requirement of outside funding for now. The aim is to go public at a time when the market is stable and there is a higher likelihood of success, ultimately leading to a more successful outcome for our stakeholders.
